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February 18, 2019

Commerce Department Recommends Section 232 Tariffs On Autos, Auto Parts

As Reuters reported, this past Sunday the U.S. Commerce Department submitted to the White House the results of its investigation into whether President Donald Trump should use his Section 232 trade powers to levy new tariffs on auto and auto part imports. While a department spokesperson would not reveal the contents of the report, press reports suggested the department would suggest new penalties are needed and recommend three options:

  • Blanket 25 percent tariffs on all imports;
  • Blanket 10 percent tariffs on all imports; or
  • Targeted duties that only would get imposed on certain imports, such as electric cars and their parts.

Fox Business suggested, however, that “Canada and Mexico are likely to be excluded, given the White House is trying to convince Congress to finalize a revamped trade deal between the three nations and a side-letter on the agreement effectively prevents it.”

The president now has 90 days to decide whether to take the Commerce Department’s advice.

The Section 232 steel and aluminum tariffs also were still in the news last week. Reuters reported that Canadian Foreign Minister Chrystia Freeland discussed lifting the tariffs with U.S. House of Representatives Speaker Nancy Pelosi. In a press conference after the meeting, Freeland said, “The Canada position is now that we have concluded (USMCA) that is all the more reason why the tariffs must be lifted.”

Additionally, according to Politico, Mexican Trade Undersecretary Luz María de la Mora said his country will put in place additional retaliatory tariffs on U.S. products within the next two to three months if President Donald Trump does not eliminate U.S. tariffs on steel and aluminum imports. De la Mora said Mexico is “assessing a carousel to include new products, and those products most likely will include a number of new steel products, but also it will include products in the agricultural sector as we have done in the past.”

U.S. Senate Finance Committee Chairman Charles Grassley (R-Iowa) suggested last week that he will address the president’s Section 232 powers and existing tariffs. According to Politico, Chairman Grassley is working on a bipartisan bill that would rein in the president’s Section 232 tariffs powers. As Connecting the Dots has reported, there are two competing Section 232 bills in the Senate, including one that would affect the steel and aluminum tariffs still in effect. Stay tuned for more information as the chairman’s plans develop.