Trump Administration to delay auto tariffs for six months

US President, Donald Trump, will not implement car tariffs for up to 180 days. The White House announced that the US is negotiating with Japan and the European Union (EU) during the tariff moratorium. Trump had been contemplating putting tariffs as high as 25% on vehicles imported into the US.

Why is Trump delaying auto tariffs?

Trump is delaying auto tariffs while US Trade Representative, Robert Lighthizer, talks to representatives from the European Union and Japan about a perceived threat from imported cars and auto parts. White House Press Secretary, Sarah Sanders, noted in a statement that a study from the US Commerce Department found that some auto imports could threaten national security.

‘United States defense and military superiority depend on the competitiveness of our automobile industry and the research and development that industry generates,’ said Sanders.

Sanders added that if a trade agreement isn’t reached in six months, the White House will decide whether to impose tariffs on auto imports.

‘The negotiation process will be led by Lighthizer and, if agreements are not reached within 180 days, the president will determine whether and what further action needs to be taken’, added Sanders.

How would auto tariffs affect US carmakers?

This latest tariff issue comes just days after the US and China raised tariffs on each other. Many US automakers like General Motors are against auto tariffs on imports because the EU and Japan could retaliate with high taxes on American cars imported into Europe and Asia.

The Alliance of Automobile Manufacturers said that implementing vehicle tariffs could cause automobile prices to rise and possibly even cost American workers their jobs.

‘By boosting car prices across the board and driving up car repair and maintenance costs, tariffs are essentially a massive tax on consumers,’ said the alliance.

‘The higher prices would lower consumer demand and could lead to the loss of as many as 700,000 American jobs. The tariffs would also roll back the benefits from the Trump tax cut and have widespread impact across manufacturers, suppliers, and dealers in all 50 states,’ added the alliance.