1. Home
  2. Trump administration weighing new tariffs on imported vehicles

Trump administration weighing new tariffs on imported vehicles

by Drew Johnson

Foreign cars might soon get more expensive in the United States.

The Trump administration announced on Wednesday that it is launching a national security probe intended to investigate whether new tariffs are needed on imported vehicles to protect the United State's ability to research and develop new automotive technologies. Having a robust automotive sector is considered vital to the country's national security.

The probe is being launched under Section 232 of the Trade Expansion Act of 1962. If the investigation discovers any threat to the United State's national security, President Trump could hit imported vehicles with a tariff, similar to the tariffs already levied against steel and aluminum imports.

"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Commerce Secretary Wilbur Ross said in a statement, according to Reuters. Ross also promised a "thorough, fair and transparent investigation."

Not surprisingly, automakers from Japan, Germany, South Korea and even China have expressed concerns over the possible tariffs. Last year the U.S. imported over 8 million vehicles from Canada, Mexico, Japan, South Korea and Germany. Any imposed tariffs would almost certainly stunt demand for those imported vehicles.

Some have speculated that the potential tariffs are a way for Trump to get Canada and Mexico to the negotiating table regarding NAFTA. Trump has long opposed the current NAFTA terms and has made it a point of his presidency to re-work the deal. Canada and Mexico are the top two vehicle suppliers to the United States, so any tariffs would hurt them the most.