In what may seem to be a majorly impacting factor for the global automotive industry, the Trump administration has decided to carry out a national security enquiry into vehicle imports. The strategic decision is aimed at imposing new tariffs on car & truck imports to the U.S. similar to those levied on steel & aluminum at the end of the first quarter of this year.
The U.S. Department of Commerce declared that the national security investigation under the U.S. Trade Expansion Act of 1962 as per Sec. 232 will examine whether the vehicles or vehicle components endanger the ability of the U.S. automotive sector to introduce new technologies. As per Wilbur Ross, the U.S. Secretary of Commerce, vehicle imports from foreign countries have deteriorated the development of the U.S. automotive sector.
It has however, also been speculated that high import duties on vehicles can impact the business of Asian automobile manufacturers such as Nissan Motor Corporation, Toyota Motor Corporation, Hyundai Motor Corporation, and Honda Motor Corporation. The U.S. has been a major business destination for the Asian automobile giants. Apparently, Ross’s statement has deeply impacted the stock price of the Asian automakers.
The Korean, Chinese, and Japanese governments have asserted that they will look into the situation. However, the Chinese officials have announced that the country is going to protect its business interests in the U.S. As per the data statistics provided by the U.S. administration, nearly 12 million vehicles were manufactured in the U.S. last year, while the nation recorded imports of 8.3 million automobiles estimated at USD 192 billion.
The vehicles imported from foreign countries included 1.7 million automobiles from Japan, 2.4 million vehicles from Mexico, 1.8 million vehicle imports from Canada, 5,00,000 from Germany, and 9,30,000 imports from South Korea. China has already opposed the move by the U.S., claiming that it may impact multilateral trade systems and disrupt the international trade framework.