US probes 'security threat' from automotive imports

Washington – On the heels of tariffs issued on imported steel and aluminium, president Trump has ordered the US department of commerce to conduct an investigation into whether imported vehicles and vehicle parts constitute a threat to national security.

As with the steel and aluminium investigations, the probe of autos and auto parts will be conducted under the authority of Section 232 of the Trade Expansion Act, which was designed to determine whether tariffs should be levied against imported goods that potentially harm US industry.

The investigation will encompass passenger vehicles including SUVs, vans and light trucks, the Commerce Department said.

"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Commerce secretary Wilbur Ross said when introducting the investigation late on 23 May.

Over the past 20 years, passenger vehicle imports have gone from 32% to 48% of the vehicles sold in the US, according to a Commerce press release.

"From 1990 to 2017, employment in motor vehicle production declined by 22%, even though Americans are continuing to purchase automobiles at record levels," the agency said.

"Now, American-owned vehicle manufacturers in the US account for only 20% of global research and development in the automobile sector, and American auto part manufacturers account for only 7% in that industry," it said.

In a 24 May statement, the Motor & Equipment Manufacturers Association said it opposed the Section 232 investigation.

“MEMA concurs that national security depends on the economic security of the country,” the association said. “Motor vehicle parts manufacturers are a critical element of this agenda.”

Nevertheless, imposing Section 232 tariffs on imported auto parts would put both US jobs and national security at risk, according to MEMA.

Employment in the auto parts industry is now at 871,000, up 19% from five years ago, according to MEMA.

“This growth in jobs has been possible because motor vehicle parts suppliers operate in an integrated, complex global supply chain,” it said. “Access to worldwide markets is critical for the motor vehicle parts industry to remain competitive.”

Trump issued tariffs of 25% against imported steel and 10% against imported aluminium 8 March, though he later allowed various exemptions.

Organisations such as the US Tire Manufacturers Association and MEMA protested the decision, on the grounds that so much of U.S. industry, including tire manufacturing, is dependent on imported steel.

Officials of the United Steelworkers union could not be reached for comment.