Economic Advisers: Trump’s Auto Tariffs Might Hurt American Jobs

Vandana Rambaran | Political Reporter

President Donald Trump’s top economic advisers Larry Kudlow and Kevin Hassett fear that Trump’s newest initiative to impose taxes on automobiles and car parts could backfire, resulting in a loss of jobs in the U.S.

“If this proposal is carried out, it would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war,” said Thomas J. Donohue, president of the U.S. Chamber of Commerce in a statement.

American industries would inevitably pay the price intended to tax imports because of the inexorable overlap of car parts that are bought from foreign countries, even if the car companies are American in brand and assembled in the U.S. Ultimately, auto tariffs would cause auto prices to climb and sales to fall.

Trump ordered Commerce Secretary Wilbur Ross on Wednesday to launch an investigation into whether car and truck imports were “weakening our internal economy” and “impair national security,” but even that logic, which has allowed Trump to impose tariffs on aluminum and steel imports in the past, seem shaky, according to his lawyers. (RELATED: Trump Admin Launches Investigation Into Foreign Car Imports That May Have ‘Eroded’ US Industry) 

Ross sought to justify the basis of the investigation, saying in an interview on Thursday with CNBC, “Economic security is military security, and without economic security, you can’t have military security.”

The Trump administration’s insistence that imports are a threat to U.S. national security has drawn outrage and disbelief from American trade allies around the world.

“I am — even more than I was with steel and aluminum — trying to figure out where a possible national security connection is,” Canadian Prime Minister Justin Trudeau said in an interview with Reuters(RELATED: Did Trump’s NAFTA Play Just Work Itself Out?)

Margaritis Schinas, the senior spokesman for the European Commission, said there was “no justification” in imposing tariffs on steel and aluminum and echoed the same sentiment about potential auto tariffs.

“Invoking national security would be even more far-fetched in the case of the car industry,” he said.

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