SMM News: the White House announced on the 17th that it would postpone its decision on whether to impose tariffs on imported cars and spare parts for six months, and instructed US Trade Representative Lettershitzer to negotiate with the relevant economies on auto trade.
The White House said in a statement on the same day that the US Department of Commerce submitted an investigation report to the president in February that imported cars and spare parts threatened to harm US national security. After an extensive review of the report, US President Donald Trump signed a proclamation on the 17th instructing the US Trade Representative to negotiate an agreement with the relevant economies to resolve the so-called "national security threats."
The talks, led by Lettershitzer, will decide whether to take further steps if an agreement is not reached within 180 days, the statement said.
According to Section 232 of the 1962 Trade expansion Act, the US Department of Commerce launched a "232 investigation" in May last year into whether imported cars and spare parts infringed US national security. The investigation was strongly opposed by members of Congress, business leaders, carmakers, dealers and major trading partners. They argue that the fact that the US government has launched the investigation is unfounded and that imposing tariffs would harm US consumers, invite retaliation from US trading partners and could undermine the global car supply chain and the rules-based global trading system.
Us carmakers' share of the domestic car market has shrunk sharply, from 67 per cent in 1985 (10.5 million produced and sold in the US) to 22 per cent (3.7 million produced and sold in the US), according to data provided by the White House. Over the same period, U. S. car imports almost doubled, from 4.6 million to 8.3 million. In 2017, the United States imported more than $191 billion worth of cars, according to the latest figures.
In response, Trump said in the announcement: "improving domestic competitiveness needs to be achieved by reducing imports."
European Commission trade commissioner Cecilia Malmstrom responded on social media, saying that what the United States calls a "national security threat" is nonsense. "completely oppose the idea of our car exports as a threat to national security."
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She added that, subject to WTO law, the EU was "ready to negotiate a limited trade agreement with the United States, including in the automotive sector."
According to the U. S. Consumer News and Business Channel reported that Malmstrom revealed that Lettershitzer will visit Paris on the 27th.
On the sidelines of the open day held by the German Embassy in China on the 18th, German Ambassador to China Gertzer told the media that car exports would not threaten US national security. "We still think that tariffs are unfair."
Gertzer pointed out that German automakers and suppliers have invested heavily in the United States, employing 120000 people in the United States.
Adam Posen, director of the Peterson Institute for International Economics, said the Trump administration's goal is to reach a voluntary export restriction agreement with major auto trading partners, but such an agreement is not in line with WTO rules.