November 11, 2019

U.S. Deadline To Decide On Section 232 Auto Tariffs Is This Week—What Will Happen?

President Donald Trump must decide by this Wednesday, November 13 whether to use his Section 232 trade powers to impose trade penalties on imports of European automobiles. (As a reminder, as CNBC explained, after the U.S. Department of Commerce issued a Section 232 national security report on auto imports in February, President Trump delayed a decision about what to do for up to six months to allow for more time for trade talks with the European Union and Japan. In that time, the United States agreed to pacts with Japan, Mexico, and Canada to avoid new tariffs on autos.)

In the final days before a decision, there is growing consensus that the president will not impose new penalties on European cars.

As Politico reported, late last week outgoing European Commission President Jean-Claude Juncker said he does not think President Trump will move forward. In an interview with German newspaper Süddeutsche Zeitung Juncker said “Trump will go around grumbling a bit, but there won’t be any car tariffs.” Senate Finance Committee Chair Charles Grassley (R-Iowa), who oversees trade policy in the upper chamber of Congress, also said he does not think President Trump will move forward with tariffs on European autos, and even U.S. Commerce Secretary Wilbur Ross agreed.

In an interview with Bloomberg television, the secretary said the Trump administration has had “good conversations” with automakers in the European Union and the administration’s “hope is that the negotiations we’ve been having with individual companies about their capital investment plans will bear enough fruit that it may not be necessary to put the 232 fully into effect, [and] may not even be necessary to put it partly in effect.”