GM says US import tariffs could mean 'smaller' company, fewer jobs

Virginia Carson
July 3, 2018

Although a tariff on cars would apply to foreign-made cars shipped into the U.S., American automakers have voiced concerns that the European Union and other regions could retaliate. Friday deadline for comments on Tariffs ends Today was the final day for comments on Trump's call for the Commerce Department to investigate whether automotive imports pose a threat to national security.

In a filing with the Department of Commerce on Friday, GM warned that higher tariffs on imported vehicles under consideration by the Trump administration could cost jobs and lead to "a smaller GM" while "isolating us businesses from the global market".

The largest US automaker said in comments filed with the US Commerce Department that overly broad tariffs could "lead to a smaller GM, a reduced presence at home and overseas for this iconic American company, and risk less - not more - US jobs".

GM's stern warning to the Trump administration last Friday (June 29) said that U.S. operations could shrink and jobs could be cut if tariffs are broadly applied to imported vehicles and auto parts.

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Though it did not file comments with the Commerce Department, Ford Motor Co., said lower tariffs are better for jobs and the economy.

The exemption, however, was revoked in May when Trump levied a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, provoking those allies to respond with retaliatory trade measures. Whereas Toyota went for the throat by saying Americans working for it are not a national security threat, Mazda steered clear of giving witty responses.

Although GM remains committed to the American market, where it operates 47 manufacturing facilities and 25 service part facilities, employing over 100,000 Americans, tariffs undermine the automaker's ability to compete globally. "We want to explain how tariffs on auto imports may jeopardize them both."The company said broad USA trade barriers on vehicles and auto parts would raise the company's costs and hurt its competitiveness against foreign auto makers, especially against manufacturers in lower-wage countries".

The company noted that Trump has repeatedly praised the Japanese automaker for investing in the United States, including a new US$1.3 billion joint venture assembly plant in Alabama with Mazda.

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The group cited studies on the impact tariffs would have on the United States economy, warning the Trump administration about "substantial job losses". A similar process led to new tariffs on foreign steel and aluminium this spring.

And as the president continues to ratchet up the rhetoric on imposing tariffs to "make America great again", and protect our "national security", the noose is tightening around the necks of large and small companies across the country and the globe.

Both GM and Toyota warned that US consumers would bear the brunt of increased costs.

In comments to the commerce department, it also said weakening South Korea's Hyundai would ultimately hurt Trump's effort to halt North Korea's nuclear ambitions.

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Toyota imported about 54% of its vehicles sold in the US last year, or about 1.3 million units, according to LMC.

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