Tennessean: Alexander bill again aims to fend off proposed auto tariff

Posted on January 15, 2019

Measure by senators from two big car-making states could delay President Trump’s proposed 25-percent tariff on imported vehicles and auto parts

Tennessee Sen. Lamar Alexander is continuing his effort to sideline proposed tariffs on imported auto parts.

The Tennessee Republican and Sen. Doug Jones, D-Alabama, on Tuesday announced they have reintroduced their Automotive Jobs Act legislation.

The measure by the senators from two big car-making states could delay President Donald Trump’s proposed 25 percent tariff on imported vehicles and auto parts.

Trump proposed tariffs last spring and cited national security grounds. In November, the president announced he would delay the tariffs while government officials consider revisions to a report on national security. U.S. Commerce Secretary Wilbur Ross’ deadline for delivering the report to the White House is Feb. 17.

The Jones-Alexander bill, if passed, would order the U.S. International Trade Commission (ITC) to study the country's auto industry, which accounts for about 3.5 percent of the nation's $19.4 trillion economy. According to a statement released by Alexander's office, the measure would require the ITC’s “comprehensive study of the well-being, health, and vitality of the United States automotive industry before tariffs could be applied.”

Under the Trade Expansion Act of 1962’s Section 232, a president can impose tariffs on goods considered a national security threat without first obtaining permission from Congress or a review by the independent ITC.

Last spring, the White House ordered a national security review under Section 232 on whether automotive imports thwart the health of the U.S. auto industry and its ability to develop new technology.

President Donald Trump is reaffirming his plans to place tariffs on steel and aluminum imports. During a White House news conference, he said "trade wars aren't so bad." (March 6) AP

Alexander and Jones introduced a measure last July also calling for ITC review before going ahead with tariffs. The bill was referred to the Senate Finance Committee. Because the Section 232 auto investigation is underway, the senators re-introduced legislation for the new Congress, Alexander's spokeswoman reported.

Tennessee and Alabama have become key automotive states since the industry expansion to the Southeast began in the 1980s. General Motors, Nissan and Volkswagen make vehicles in Tennessee, while Honda, Hyundai and Mercedes make vehicles in Alabama. Hundreds of related factories in the region supply auto parts to the assembly lines. Many auto parts include imported components.

Auto executives have insisted tariffs would raise prices. The National Automobile Dealers Association figured a 25 percent tariff, which acts like a tax on imports, would lift prices of U.S.-made vehicles by about $2,270, and raise prices on imported autos by about $6,875.

Some analysts suggest the president has been using the threat of automotive tariffs as leverage in wider trade negotiations with China and European nations.