Daily Management Review

Trump Will Postpone Tariff Decision On Foreign Cars From EU & Japan, Expect Automakers


Trump Will Postpone Tariff Decision On Foreign Cars From EU & Japan, Expect Automakers
According to five auto officials, major auto companies in the United States believe that the self-imposed deadline by president Donald Trump for the possibility of imposing tariffs of up to 25 per cent on the import of cars and auto parts from the European Union and Japan over issues related to threat to national security will again by deferred later this week. This was claimed in a report published by te news agency Reuters.
The auto makers believe that such as a step will not be taken given the ongoing trade war with China and therefore Trump will probably announce the deferment later this week. This measure is also of importance to foreign car makers because they have been trying to impress upon the Trump administration their investments in the US and the argument that imposing tariffs will not only raise costs but could also result in job losses in the auto sector in the US.
Tariffs may not be necessary, US Commerce Secretary Wilbur Ross had said earlier this month. And when Trump is faced with the deadline of imposing the tariffs later this week, he would probably announce a six-month delay, believe EU officials.
Earlier in May this year, Trump had postponed the imposition of the tariffs on foreign cars from the EU and Japan by 180 days as he directed the US Trade Representative Robert Lighthizer to negotiate with the EU and Japan over the issue as well as other trade issues.
According to the Reuters report quoting information from several auto industry officials, many foreign automakers were asked to provide details of the investments they have made in the United States by Lighthizer’s office recently.
No comment on the report was available from White House and Lighthizer’s office.
It has been reported that a groundbreaking at Volkswagen AG’s Chattanooga assembly plant will be attended by Tennessee Governor Bill Lee, a Republican ally of Trump’s. The event will mark the beginning of an $800 million expansion project in the US by the German auto major for manufacturing of electric vehicles that will lead to creation of about 1,000 jobs. Remarks from Germany’s ambassador to the United States will also be part of the high-profile event.
Its plan to begin producing EVs by 2022 in Tennessee was announced in January by VW. 
Earlier in late 2017, its plans to make in investment of $1 billion for expanding its manufacturing footprint around Tuscaloosa, Alabama, and the creation of 600 jobs was announced by Daimler AG.
And according to market analysts and experts, it is more unlikely that Trump will impose tariffs on Japanese cars in comparison to the chances of imposing tariffs on EU cars and auto parts. This is because announcement of investments in the US worth billions of dollars have been announced by Japanese automakers. For example, the joint venture between Toyota Motor Corp and Mazda Motor Corp for development of a plant in Alabama will see an investment of $1.6 billion.

Additionally, a limited trade deal in September was also signed by Trump and Japanese Prime Minister Shinzo Abe in which Tokyo cut down import tariffs on farm goods, while Washington scaled back tariffs on Japanese machine tools and other products.