Trade Cases

Democrat Coalition Presses for Release of Section 232 Report on Auto Tariffs

February 14, 2020

Members of the New Democrat Coalition Trade Task Force are outraged that the report for the Section 232 investigation into auto imports has not been released and that the threat of tariffs continues to create economic uncertainty. The results of the investigation were submitted to President Trump in February 2019, but the report was never presented to Congress or the public, as required by the Trade Expansion Act of 1962 and by a provision for its release that was included in the Consolidated Appropriations Act for Fiscal 2019. The Appropriations Act provision, requiring release of the report by Jan.19, 2020, was ignored by the administration.

“American autoworkers, part suppliers and retailers, dealers, vehicle service providers, and millions of consumers have lived under the threat of tariffs since you initiated the Section 232 investigation into auto imports on May 23, 2018,” stated the Coalition in a letter last week to President Trump, copied to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.

“As you have admitted publicly, there is no national security risk from automobiles and auto part imports. In fact, your abuse of the Section 232 tariff process jeopardizes our national security by alienating our allies and threatening the economic security of American workers,” continued the letter.

When a Fox News report asked Trump in March 2019 if auto imports threaten the U.S., the president replied, “Well, no.” He continued, in reference to trade deficits, “What poses a national security risk is our balance sheet. We have to have—we need a strong balance sheet. Otherwise you don’t have national security.”

The coalition says that withholding the report violates not only the Trade and Appropriations Acts, “but the willful disregard for these laws threatens American workers as well as the balance of power that is so essential to our Constitution.”

The group urged Trump to release the report and “abandon any further tariff action that threatens the American automotive sector, auto workers, and our economy.”

In a report in January, the Congressional Research Service estimated that imposing auto tariffs would raise the price of the average car sold in the U.S. by more than $4,000. Last month the Trump administration justified withholding the report because “releasing it now would interfere with the president’s ability to protect confidential executive branch communications and could interfere with ongoing negotiations.”

In an interview with CNBC on Jan. 22, President Trump admitted to threatening the EU with auto tariffs when negotiating with European Commission President Ursula von der Leyen. “I said, ‘Look, if we don’t get something, I’m going to have to take action.’ And the action will be very high tariffs on their cars and other things that come into our country,” said Trump.

Following Trump’s EU threat, Commerce Secretary Ross stated in an interview at the World Economic Forum, “We have a perfect justification to put tariffs on if we wish to; the president decided it was better to negotiate.” Ross added that the administration has had constructive negotiations with German, Korean and Japanese automakers.

“So far we haven’t felt the need to do it. But if people do silly things, if they do protectionist and discriminatory things, like pillar one of the digital-services tax, we’re obviously going to respond,” said Ross.

Ross argued that the president did make a decision regarding tariffs in response to the receipt of the Section 232 report—“he decided the path forward was to negotiate as long as that was bearing fruit.”