(Bloomberg) -- President Donald Trump has drawn swift and widespread condemnation for his potential crackdown on U.S. car imports.
The U.S. Commerce Department has started investigating whether the flow of autos into America is weakening its economy and may impair national security, following a White House directive. Any tariffs would puts companies including Mazda Motor Corp. that rely entirely on imports in a major bind. Even Detroit’s General Motors Co. and Ford Motor Co. ship vehicles into their home market from overseas. And American allies Mexico, Canada, Japan and Germany are the leading sources of imported cars and trucks.
Here's how trade policy experts, auto industry representatives and government leaders are reacting:
John Bozzella, Global Automakers
“The U.S. auto industry is thriving and growing,” said the president of the Washington trade group that represents car manufacturers including Toyota Motor Corp. and Hyundai Motor Co. “To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”
Cody Lusk, American International Automobile Dealers Association
“It can’t be repeated enough: Tariffs are taxes. American families who can least afford a 25 percent price increase on vehicles will bear the burden of this tariff,” the president of the group representing 9,600 auto retail franchises said. “To treat auto imports like a national security threat would be a self-inflicted economic disaster for American consumers, dealers, and dealership employees.”
Eric Schweitzer, Association of German Chambers of Commerce and Industry
“We have to consider this as something of a provocation,” the president of the lobby group said. “I have the growing impression that the U.S. no longer believes in the competition of ideas, but only the law of power. It fills me with grave concern.”
Hiroshige Seko, Japan Trade Minister
“Imposing broad, comprehensive restrictions on such a large industry could cause confusion in world markets, and could lead to the breakdown of the multilateral trade system based on WTO rules.”
Dan Ikenson, Cato Institute
“There are no merits whatsoever to the argument that imported autos somehow threaten U.S. national security. The mere assertion is unworthy of consideration, much less a full blown investigation under the guise of law,” the director of the Center for Trade Policy Studies at the limited-government think tank said. “President Trump is misappropriating the law in ways not dissimilar to the methods used by Hugo Chavez and Nicolas Maduro to destroy Venezuela, and Congress needs to start treating this regime as the profound threat to the republic that it clearly is.”
Bill Reinsch, Center for Strategic and International Studies
“It pushes the envelope on the use of national security,” the under secretary of commerce for export administration during the Clinton administration said. “Courts normally defer to the president on that, but this is a case where there is no auto shortage, the companies are not currently in trouble, and there are plenty of alternative sources from friendly allies. I could see a court saying this doesn’t pass the laugh test if there were a lawsuit—and there no doubt will be if any actual action is ever taken.”
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