WASHINGTON — A coalition of more than 270 business groups, including those representing auto makers and suppliers, sent a letter this week to U.S. senators urging support for legislation that would require congressional approval of tariffs designated for national security reasons.
The letter suggests President Donald Trump is abusing authority intended to give presidents power to protect the military industrial base by imposing trade remedies during times of conflict.
The White House used the national security rationale to impose a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports, saying they threatened domestic producers. It is also investigating whether auto imports pose a national security threat and should be subject to tariffs.
Sen. Bob Corker, R-Tenn., this month introduced the bipartisan bill with support from eight other senators. It would require the president to submit to Congress any proposal to adjust imports based on a national security rationale. It retroactively applies to steel and aluminum tariffs. Majority Leader Mitch McConnell has refused to bring the measure up for a vote.
The business groups, including the Alliance of Automobile Manufacturers, the American International Automobile Dealers Association, the Motor and Equipment Manufacturers Association and Auto Care Association, said that the president's delegated power to initiate tariffs based on national security needs to be reined in because the current moves are inviting retaliation from trading partners and undermine the ability of the U.S. to lead allies in efforts to combat real cases of unfair trade and investment by countries such as China.
"In addition, a new threat to levy a 25-percent tariff on all imported automobiles and auto parts would inflict enormous harm on the U.S. economy," the letter said.
"Approximately $350 billion of imports would be affected, and retaliation on the same order would be expected. The U.S. auto industry — the nation's largest manufacturing sector — and many downstream industries would be profoundly harmed by this action, as would sectors such as agriculture and chemical manufacturing that would be targeted in retaliation. The economic impact of this action would be approximately 10 times larger than that of the tariffs on imported metals."
The steel and aluminum tariffs were imposed globally, with few exceptions for allies, even though Chinese overproduction is the main culprit for low metals prices. Commerce Secretary Wilbur Ross has also said that economic security equals national security.
In a conference call with reporters Wednesday morning to express concerns with the administration's proposed auto tariffs, John Bozzella, president of the Association of Global Automakers, said Congress should take back some of the power over trade it has ceded to the president.
"Congress has a role to play here with regard to oversight, to make sure that the tools they've provided the president are used effectively and for the purposes for which they are intended," he said.
Lighthizer lashes out
Meanwhile, U.S. Trade Representative Robert Lighthizer issued a statement Tuesday evening angrily defending the Trump administration's decision on the steel and aluminum tariffs and castigating the EU and other countries for what he characterized as unjustified retaliation.
"President Trump has taken actions on trade in steel and aluminum to protect our national security interests. These actions are wholly legitimate and fully justified, both as a matter of U.S. law and World Trade Organization rules," he said.
"By contrast, the European Union has concocted a groundless legal theory to justify immediate tariffs on U.S. exports. Other WTO members, including China, have adopted a similar approach.
"These retaliatory tariffs underscore the complete hypocrisy that governs so much of the global trading system. For months, the EU, China and others have criticized the trade policy of the United States, while claiming to champion the WTO. But their recent tariffs prove that they simply ignore WTO rules whenever doing so is convenient."
He said nations have the power under WTO rules to decide for themselves what actions are necessary for their security. The WTO allows nations to quickly respond to tariffs deemed outside normal rules while waiting for a WTO tribunal to rule on the matter, but Lighthizer said tariffs in the name of security are exempt from such safeguard actions.
"When the EU and others falsely assert the U.S. steel and aluminum duties are safeguard measures, and impose retaliatory duties under this pretense, they do great damage to the multilateral trading system. Indeed, they show that they are willing to distort WTO rules to mean whatever they want, whenever they want."
He added: "Faced with these unjustified tariffs, the United States will take all necessary actions under both U.S. law and international rules to protect its interests."
Eric Kulisch, [email protected], is a reporter with Automotive News, a Detroit-based sister publication of Tire Business.