Canadian impact of American auto tariffs
The U.S. Department of Commerce is gearing up for a public hearing Thursday in Washington, D.C. as it pursues its investigation of automotive imports as a threat to national security.
On the eve of the hearing, Allan Small, senior investment advisor at Allan Small Financial Group, HollisWealth told BNN Bloomberg he’s spoken to a few people who say the 25 per cent tariffs on all auto imports, if imposed, would make the “2008 [recession] look like a picnic.”
The U.S. Commerce Department gave the public the opportunity to weigh in ahead of Thursday’s hearing, and there’s been more than 2,000 submissions from industry leaders, government officials, and regular consumers so far – mostly urging the Trump administration to stand down. Here’s what some of them have had to say.
“We understand the Administration’s desire for a “level playing field” when it comes to international trade. However, imposing 25 per cent tariffs on imported autos and auto parts will actually hurt consumers and our member companies’ ability to invest in the U.S. and compete in the global market… It may seem attractive in this instance to pursue economic goals under the umbrella of national security considerations; however, doing so could very well set a dangerous precedent that other nations could use to protect their local market from foreign competition.” – Auto Alliance
“We urge the Department of Commerce to look for ways to open global markets and increase exports. Increasing the price of automotive parts and causing delays will cause harm to most Americans. A vibrant U.S. economy depends on the timely accessibility of automobile repair parts manufactured in both the United States, and globally, which is critical to the national economy.” – The Certified Automotive Parts Association
“While it is important for the U.S. government to work effectively to improve opportunities overseas and address foreign government market distortions that hold back greater growth in manufacturing generally and the automotive sector specifically, those are commercial issues. The unilateral imposition of tariffs or quotas that a Section 232 investigation could authorize would undermine this sector and broader manufacturing production and jobs in the United States. – National Association of Manufacturers
“To make the U.S. auto sector more competitive, tariffs would represent a huge step in the wrong direction. Rather, to build on the impressive strengths of the United States as a platform for auto manufacturing — to serve the domestic market and for export — the Administration should abandon its tariff threat and refocus its attention elsewhere.” – John Murphy, senior vice president for International Policy, The U.S. Chamber of Commerce
“The U.S automobile and automotive parts sector is not impaired by the presence of international competitors. The presence of European manufacturers has further strengthened the U.S. economy, and European companies with production facilities in the U.S. have been fully committed and reliable partner to meet domestic demand for automobiles, and they export about 60 per cent to third countries, including the EU.” – European Union
“The trade relationship with Japan, an ally, contributes not only to economic prosperity of the U.S., but also to its security. The import of automobiles and auto parts from Japan has not by any means been an impediment to the security of the U.S., and will not become one.” – Government of Japan
“The record shows a virtual absence of support for restricting imports of automobiles and automotive parts … These views reflect the reality that the U.S. automotive industry – and by extension U.S. economic and national security – are stronger by having access to imports to complement the already-strong U.S. production of automobiles and automotive parts. In particular, trade with China in automobiles and automotive parts is a net benefit to the U.S. industry, reflecting the choices of the Big Three automakers to invest in and trade with China.” – The China Chamber of International Commerce
“There are no tariffs or non-tariff barriers on automobiles and automotive parts between Canada and the United States. As a result of free trade in this sector, the United States has enjoyed an automotive trade surplus with Canada since at least 1960. Canada is the top destination for U.S. automotive exports. In 2017, the United States exported more than $50 billion in automotive and automotive parts to Canada, accounting for 37.5 per cent of U.S. global exports of such goods. Maintaining open trade of automobiles and automotive parts between our countries is thus crucial to the economic well-being of both of our industries, workers and communities, which in turn supports our collective security. Imposing restrictions on imports of Canadian automobiles and automotive parts would deal a crippling blow to the U.S. automotive industry.” – David MacNaughton, Ambassador of Canada to the United States
“Canada’s automotive sector is primarily located in the Province of Ontario, and has a strong and deeply-integrated trading relationship with the United States. Together, the U.S. and Canada form one of the most competitive and successful regional economic platforms in the world. It is hard to see how the inclusion of the integrated U.S.-Canada automotive sector in any action taken pursuant to the section 232 investigation would enhance U.S. national security or strengthen the U.S. automotive sector.” - Jim Wilson, Ontario minister of economic development, job creation and trade
“I am a Trump supporter 98 per cent of the time. In this case I am not. Tariffs only raise prices for the "forgotten man" and put money into some government coffer only to be spent foolishly elsewhere.
Please ask our president to stop the trade wars.” - William Bussler
“I’m for tariffs on cars, just not parts to maintain them. Especially cars that we already own! – Steven Grosklos
“Imposing tariffs long term may be a good idea. But if tariffs and/or taxes are going to be imposed on automobile manufactures for importing items, at least give the companies some time to come up with alternative plans...That way manufactures can have time to put plans in place to actually manufacture here, instead of importing. This way, it can be a win-win situation; we don’t import, and we actually make more goods here in the United States, creating jobs.” - James Kent
“Millions of American workers, including myself, are employed within these segments that import automobiles and auto parts. These tariffs will be crippling for automotive & automotive parts small businesses around the country!” - Nestor Martinez
*Some comments have been edited and condensed for the sake of brevity