U.S. Rep. Terri Sewell, D-Selma, said Tuesday that she is deeply concerned about a U.S. Department of Commerce’s confidential report on Section 232 national security tariffs that could lead to President Donald Trump imposing tariffs on foreign automobiles.
“I am deeply concerned about the Department of Commerce’s Section 232 national security report on autos, as well as potential tariffs on the auto industry in Alabama,” Sewell said. “This report was delegitimized from the start when President Trump called for a 25 percent tariff on autos before the investigation even began. The 24,000 auto workers in Alabama know that U.S. auto jobs do not threaten America – they strengthen it. I urge the president to consider the people of Alabama and the damage auto tariffs would have on our state.”
The U.S. Commerce Department sent a report on Sunday to Trump that could potentially unleash steep tariffs on imported cars and auto parts, possibly provoking a sharp backlash from the industry even before it is unveiled, the agency confirmed.
The Commerce Department has refused to release details about the report. Most cars today are built from components from all over the world, no matter where they are assembled. Trump will now make the decision based on the report over what to do. He could potentially place a 25 percent tariff on fully assembled foreign automobiles. The president could possibly place up to a 25 percent tariff on imported automobile parts.
Alabama is the second most important automobile manufacturing state. Mercedes, Honda, Toyota, Autocar, Polaris, Hyundai and soon, Mazda all have major factories in Alabama. All of those plants use both domestically produced parts as well as imported components. A tariff on parts would raise the cost of producing those vehicles and other countries will almost certainly retaliate with their own tariffs on cars being exported from Alabama.
The Alliance of Automobile Manufacturers released a statement opposing automobile tariffs.
“While we understand that the administration is working to achieve a level playing field, tariffs are not the right approach,” the statement read. “Tariffs on autos and auto parts raise vehicle prices for all customers, limit consumer choice and invite retaliatory action by our trading partners. Automakers support reducing trade barriers across the board and achieving fairness through facilitating rather than inhibiting trade. Domestic and international automakers build autos in 45 facilities in 14 states and support more than 7 million jobs across the U.S. We believe that the economic security of the auto industry and country would be strengthened through modernizing NAFTA to grow U.S. manufacturing and jobs, concluding a U.S.-EU Trade Pact to address trade barriers on both sides of the Atlantic and seeking other opportunities to expand market access for U.S. auto exports.”
The Alliance warned that buyers of imported vehicles would face an average price increase of $5,800 from a 25 percent import tariff, according to an analysis of U.S. Department of Commerce data.
Congresswoman Terri Sewell is a member of the House Ways & Means Subcommittee on Trade and is serving her fifth term representing Alabama’s 7th Congressional district.
