The Trump administration is considering whether to impose a new 25 percent tax on imports of motor vehicles and parts. A decision could come by November 14. Here are six key points to keep in mind about the proposed new taxes:
The Commerce Department alleges that imports of autos and parts threaten to impair U.S. national security. It further alleges that cars built in U.S. factories by workers employed by companies including BMW, Fiat Chrysler, Honda, Subaru, Toyota, and Volkswagen also are a national security threat.
The Commerce Department has denied requests from U.S. Senators to view the Section 232 report justifying its allegations. The Commerce Department has also been sued by the Cause of Action Institute for failing to respond to Freedom of Information Act (FOIA) requests seeking a copy of the Commerce Secretary’s final report to the President regarding the Section 232 investigation into the national security impacts of the Administration’s proposed foreign automobile tariffs.
A 25 percent tax would add thousands of dollars to the price of imported cars. An NTU Foundation study on the impact of new tariffs applied to all imports found that imported car prices would increase by $4,205 on average.
Americans do not support this proposed tax increase. More than 98 percent of public comments submitted to the Department of Commerce opposed the imposition of new import taxes.
U.S. motor vehicle output has never been higher.
A tax on imported parts would increase the cost of assembling cars in the United States. This would undermine the administration’s efforts to boost U.S. manufacturing. For example, when President Trump revoked California’s federal waiver on emissions, the White House proclaimed “President Donald J. Trump is Making America the Best Country in the World to Build and Buy Cars.” If that’s really the case, he will not impose new taxes that would make America a less desirable place to build and buy cars.