Trump tariffs would hurt jobs, automakers say

WASHINGTON ���� Automotive industry representatives on Thursday blasted President Donald Trump��s proposed tariffs on imported autos and auto parts,�with trade groups saying a tax of 25 percent on imports would increase costs on American-made cars as well, resulting in decreased production and job�losses.

While thanking Trump for his leadership, former Missouri Gov. Matt Blunt, head of the American Auto Policy Council made up of Ford, General Motors and Fiat Chrysler, said the three are ��very concerned that the positive effects of the president��s policies could be undermined by tariffs.��

But Trump's potential tariffs also drew support from the United Auto Workers union, which represents hourly employees of the traditional Detroit Three automakers in the U.S.

Trump says that European and Chinese auto tariffs on U.S.-made vehicles are unfair. Automakers say that raising tariffs risks undermining their investments, hurting sales and eviscerating jobs.

Blunt said that tariffs �� if imposed on national security grounds as suggested by Trump �� would result in a net loss of jobs ��by increasing the costs of manufacturing cars �� leading to lower demand, lower sales and production and ultimately fewer jobs in the American auto industry.��

Blunt and others told Commerce Department officials �� with Commerce Secretary Wilbur Ross in the audience for a daylong hearing on the tariff proposal �� that trade barriers in other countries need to be addressed, but not through tariffs.

More: Trade war: Trump administration threatens China with $200 billion in additional tariffs

More: Trump tariffs could add $5,000 to price of new vehicle in U.S.

More: Trump's tariffs: A closer look at what they are and how they will work

More: Trump's European car tariff threat could crunch German automakers

That approach, they said, would lead to retaliation and increase the price of parts and components necessary in a global supply chain. Blunt also noted that while American automakers use far more U.S. and North American components than foreign automakers doing business in the U.S., the Detroit automakers still rely on many international suppliers or suppliers that rely on international business.

But as a long list of opponents��� including automakers, parts manufacturers, repair stations and dealers �� lined up to oppose the proposal, a representative of the UAW spoke in favor of the investigation and potential tariffs, saying trade has hurt American workers, driving jobs into low-wage countries like Mexico and China in recent decades.

��It��s our hope the Trump administration will take targeted measures to protect domestic manufacturing,�� said Jennifer Kelly, director of the UAW��s research department, adding that she understood that broad tariffs or quotas ��could cause harm.��

.oembed-frame { width: 100%; height: 100%; margin: 0; border: 0; }

UAW��s Jennifer Kelly, director of the union��s research department, says investigation into #autoimporttariffs is "long overdue." "Trade has .... hurt workers at the bargaining table... in the past two decades, the auto trade deficit has grown 121%."

— Todd Spangler (@tsspangler) July 19, 2018

The Commerce Department was holding a daylong hearing on Trump's proposal to raise taxes at the department's headquarters in Washington. Testimony�will include comments from�ambassadors from Canada, Mexico and the European Union.

As testimony kicked off,�Ann Wilson of the Motor and Equipment Manufacturers Association said that a survey of parts manufacturers shows that 80 percent of respondents said that if tariffs are imposed, the businesses would cut jobs, delay research and development and shift jobs outside the U.S.

In May, Trump proposed the tariffs and asked Ross to launch an investigation into whether they were justified under national security grounds such as those used to increase tariffs on imported steel and aluminum.�

.oembed-frame { width: 100%; height: 100%; margin: 0; border: 0; }

3/"Tier One suppliers provide 77% of the content value of new vehicles. They are dependent on inputs from around the world... The imposition of tariffs will have a negative impact on U.S. vehicle parts suppliers. This will impact employment and, in turn, weaken the US economy."

— Todd Spangler (@tsspangler) July 19, 2018 .oembed-frame { width: 100%; height: 100%; margin: 0; border: 0; }

16/Dealer's assoc Peter Welch says regarding R&D tariffs are "going to be detrimental, pure and simple."

— Todd Spangler (@tsspangler) July 19, 2018

With the threat coming even against American allies as the Trump�administration struggled to rewrite the North American Free Trade Agreement with Canada and Mexico and reach agreements with the European Union, many outside experts saw it as the president trying to find leverage to strike better deals.�

And while some critics of NAFTA and other trade deals believe they've sent American jobs overseas, the business community and many American manufacturers have argued vociferously against the proposed tariffs. General Motors and others have said�a 25 percent tariff on imported autos and auto parts could have the effect of forcing costs up and production down, meaning jobs could be lost.�

More: Automakers to Trump: Higher tariffs would affect consumers, jobs

"If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad" for GM and, "risk less �� not more �� U.S. jobs," the Detroit automaker said in written testimony to the Commerce Department late last month.�

On Wednesday and Thursday, major auto trade groups, including organizations representing Detroit's automakers, international automakers, auto dealers and parts suppliers, sent a letter to Trump and ran full-page ads in the Wall Street Journal and POLITICO, as well as on other media websites, asking the president not to approve the tariffs if they are recommended by Commerce after the hearing and investigation.

Jennifer Thomas, vice president of federal government affairs at the Alliance of Automobile Manufacturers, was set to testify Thursday against what she called in her prepared testimony an "unprecedented, unwarranted investigation."�

"The opposition to this investigation is widespread and deep because the damaging consequences are alarming," her testimony read. "Higher auto tariffs will harm American families and workers, along with the economy. Simply put, auto tariffs are a massive tax on consumers."

While some supporters were expected to argue that more needs to be done to protect American jobs and that tariffs could help do that, automakers argued that taxing auto imports and auto parts likely meant that costs of production would rise and that other trading partners would assuredly increasing their own existing tariffs on American imports.

That, in turn, could have a severe effect in auto production states, including Michigan.

"(Tariffs), however well intentioned, would ultimately be counterproductive �� giving an edge to foreign production at the expense of U.S. manufacturing," said Linda Dempsey, vice president of international economic affairs for the National Association of Manufacturers.

Follow Detroit Free Press reporter Todd Spangler on Twitter at @tsspangler.