Global automakers are warning the Trump administration of the “detrimental” effects of its proposed tariffs on imports of vehicles and automotive parts, with General Motors Corp. saying it could lead to job cuts and a diminished presence in the United States.
“Increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs,” GM said in a submission to the U.S. Department of Commerce that was published Friday.
“The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.”
Several of the worlds leading automakers, including GM and Toyota Motor Corp., filed comments this week detailing concerns about the proposed 25 per cent tariffs on U.S. imports of vehicles and automotive parts. Last month, U.S. President Donald Trump initiated a Department of Commerce investigation to determine the effect imports of vehicles and automotive parts have had on national security.
GM also warned that the additional auto tariffs — on top of the steel and aluminum tariffs already in place — would at some point trickle down and be felt by customers, affecting demand for new vehicles. The decline in vehicle sales, the company said, would have a negative impact on the workforce in the U.S., and threaten jobs down the supply chain.
“Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could lead to less investment, fewer jobs, and lower wages for our employees,” the automaker warned.
In its 15-page submission to the Department of Commerce, Toyota echoed GM’s sentiments, adding that tariffs “would have a negative impact on all manufacturers, increasing the cost of imported vehicles as well as domestically produced vehicles that rely on imported parts.”
“Toyota shares the Administration’s goals of increasing U.S. jobs, growing the economy and strengthening national security,” the automaker said. “But we believe that a potential 25 per cent tariff on imported vehicles and auto parts will, in fact, have the opposite affect.”
The Japanese automaker also said the tariffs would harm some of the U.S.’s closest allies, including Canada, when such Commerce investigations traditionally inspect whether imports come from unsafe sources.
“That standard is simply not met here, as imports of vehicles and parts from countries like Canada, which has been defined by law as part of the U.S. defense industrial base and which has been closely integrated with U.S. automotive production since the U.S.-Canada Auto Pact entered into force in 1965,” the automaker said.
“Engaging in trade wars with our allies would diminish, not enhance, U.S. national security, jobs, and prosperity.”
The Association of Global Automakers, an industry group that represents international automakers including Toyota, Volkswagen AG and BMW AG, said in a separate filing that “there is no support” for the idea that the import of vehicles and auto parts threaten the economic health of the U.S. auto industry.
“Trade, including imports, has not threatened the health of the U.S. automotive sector, but in fact has strengthened it,” said John Bozzella, the chief executive of the Association of Global Automakers.
“No one has asked for protection under our laws protecting against fairly traded imports, for the simple reason that our industry is thriving.”
The proposed tariff has already prompted widespread criticism from various organizations and manufacturers of the North American auto industry. Earlier this week, representatives of the Canadian auto groups appeared before a House of Commons committee in Ottawa to warn that tariffs would decimate the industry in Canada. Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, said the tariffs would cause “carmageddon” and see the industry “grind to an immediate halt.”
The Department of Commerce is now accepting rebuttal comments for responses already submitted until July 6, and will hold public consultations in Washington in July.