Legislation Would Require Impact Study on Auto IndustryMarch 25, 2019
U.S. Representatives Terri Sewell (D-AL) and Fred Upton (R-MI) introduced legislation earlier this month to require the International Trade Commission (ITC) to conduct a comprehensive study on the economic importance of automotive manufacturing in America before tariffs on automobiles and auto parts could be applied.
The President’s tariff trade policy threatens U.S. auto workers, including nearly 40,000 hardworking men and women in Alabama alone,” Sewell said. “This administration has overreached its Section 232 authority by claiming that cars and auto parts threaten American national security. An independent study by the ITC would ensure that U.S. trade policy takes into consideration its impacts on our American workers and consumers.”
“Countless jobs in Michigan and across the country depend on America’s automotive industry. We simply need to better understand the current economic well being of the auto industry before any tariffs are applied that could impact those jobs,” Upton said. “This bipartisan legislation introduced would ensure the Administration and the Congress has all of the facts as we work to secure better trade deals with our trading partners.”
Currently, Section 232 of the Trade Expansion Act of 1962 gives the President authority to apply tariffs on imported of goods or materials from other countries if those imports threaten national security. The Trump administration has proposed using Section 232 to dramatically raise tariffs on auto imports up to 25 percent.
The Automotive Jobs Act (H.R. 1710) would require the ITC to analyze, among other things:
- The effect an auto plant has on the unemployment rate, per capita income, and education level in the community in which the plant is located;
- The effect an automotive plant has on helping the region attract and expand non-automotive jobs and wages;
- The number of component parts for automobiles that are not produced in the U.S. and would, thus, be unavailable to auto producers if prohibitively high tariffs were imposed on imports; and,
- The effect an increase in auto manufacturing costs would have on jobs in the U.S.
The legislation would require the ITC report to completed before auto tariffs can be applied.
According to the Center for Automotive Research, a 25 percent tariff on imported cars, trucks and auto parts would increase the price of an average imported vehicle by as much as $7,000; increase the cost of an average vehicle built in the U.S. by nearly $2,300; lead to the loss of up to 715,000 jobs; and cost the U.S. auto industry up to two million annual vehicle sales.
The tariffs would deal a devastating blow to Alabama, where auto manufacturers are a powerful driver of the local economy. Mercedes, Honda and Hyundai assembly plants have made the state a hub for car and light truck production.
Sewell is also a lead sponsor of the bipartisan, bicameral Trade Security Act, which would reform Section 232 to increase Congressional oversight in the Section 232 process and reassign national security threat assessments to the Department of Defense.
The Automotive Jobs Act may be viewed here.
Press Release. (2019). “Sewell, Upton intorduce bipartisan legislation to delay auto tariffs”. Retrieved from https://sewell.house.gov/media-center/press-releases/sewell-upton-introduce-bipartisan-legislation-delay-auto-tariffs.