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US tariff threat hits European automakers' stocks

US tariff threat hits European automakers' stocks

Tariffs that hurt Canada will hurt the competitiveness of the US auto industry as well, Trudeau said, adding some automobile pieces cross the border six times before they end up in an assembled vehicle.

The Trump administration on Wednesday launched a national security investigation into auto and truck imports that could lead to new us tariffs similar to those imposed on imported steel and aluminum in March.

The investigation "will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States", the Commerce Department said. The tariff proposal was first reported by the Wall Street Journal.

A move by the United States to explore tariffs on auto imports is based on flimsy logic and is part of the pressure from Washington to renegotiate the NAFTA trade pact, Canadian Prime Minister Justin Trudeau said on Wednesday. President Trump used the same provision of US trade law in March when he called for tariffs on foreign-made steel and aluminum. Any imposed tariffs would nearly certainly stunt demand for those imported vehicles.

Chinese automaker Geely Holding Group urged free trade practices for the auto industry, which is built on a complex supply chain under which vehicle components for any given car often originates from numerous countries.

"An increase in tariff barriers should be avoided", the body said, saying it had "always spoken out in favor of mutual reductions in tariffs and for free-trade agreements".

After many decades of losing your jobs to other countries, you have waited long enough", Trump tweeted in the hours before the announcement, which came amid reports that North American Free Trade Agreement talks between Mexico, Canada, and the USA have stalled over auto manufacturing rules.

Bozzella noted 12 million cars and trucks were produced in the United States previous year.

"If the European Union wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.", Trump wrote on Twitter in March.

The Alliance of Automobile Manufacturers, the trade group representing major US and foreign automakers, indicated it did not favor the move, urging the administration to "remove barriers to free trade" and saying it was confident that vehicle imports do not pose a national security risk.

However, while President Trump has long promised to protect the US auto industry, it's far from clear that the industry itself wants protecting. "After many decades of losing your jobs to other countries, you have waited long enough!"

Almost half of the vehicles sold in the USA are imported, with many coming from assembly plants in Mexico and Canada.

Toyota, which has 10 USA plants and 1,500 US dealers, said in a statement that any tariffs "could hurt American jobs" and raise costs for consumers.

The tariffs could be devastating, but it's doubtful the USA will go through with them because the resulting higher costs would give competitors in Europe and elsewhere a competitive advantage, said Sui Sui, an associate professor at Ryerson University's Ted Rogers School of Management. "I am not happy with their requests but I will tell you, in the end we win, we will win and we'll win big".

Trump appeared focused on the short term political gains, teasing "big news coming soon for our great American Autoworkers" before he issued the directive.

"I welcome the fact that they're investigating this", United Auto Workers President Dennis Williams said Thursday in Detroit.

Talks aimed at rewriting the North American Free Trade Agreement have stalled between the US and Canada and Mexico, with the discussions at an impasse over rules for vehicle production.

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