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IMA Executive News & Views Blog

Commerce Department Launches Section 232 National Security Investigation on Imports of Passenger Vehicles and Auto Parts; NAM Responds

by the National Association of Manufacturers (NAM)

Late on May 23, President Trump instructed Commerce Secretary Wilbur Ross to initiate an investigation pursuant to section 232 of the Trade Expansion Act of 1962 to determine if imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair U.S. national security. The President emphasized that “[c]ore industries such as automobiles and automotive parts are critical to our strength as a Nation.” The Commerce Secretary also put out a statement initiating the investigation. The Secretary’s action starts a Commerce Department investigation, with input from the Department of Defense, that can take up to 270 days. The Commerce Department indicated that it will publish a notice shortly in the Federal Register announcing a hearing date and inviting comment from industry and the public to assist in the investigation. In making the announcement, Secretary Ross’ release emphasized that the imports of passenger vehicle imports as a percentage of total sales in the United States increased from 32 percent to 48 percent over the last 20 years and that the employment in the sector has declined by 22 percent between 1990 to 2017. Data from the auto industry indicates that overall passenger vehicle production in the United States has more than doubled from 5.6 million vehicles in 2009 to 12.2 million vehicles in 2016 and more than one million more cars are manufactured in the United States now than in 1993. Reports indicate that the President is contemplating 20 to 25 percent tariffs on imported vehicles and auto parts.

The NAM issued this press release from NAM President and CEO Jay Timmons explaining that “incorrectly using the 232 statute will create unintended consequences for U.S. manufacturing workers that will limit the chance for Americans to win, just as we do when government gets out of the way and allows us to lead.” The release also emphasized that the progress that manufacturers have seen on tax and regulatory reform will be endangered by “restricting trade and promoting retaliation against American-made products that will undermine manufacturing and jeopardize the jobs of manufacturing workers in the United States.”