On May 23, President Trump instructed Secretary of Commerce Wilbur Ross to initiate a Section 232 investigation to determine if the imports into the U.S. of automobiles, including SUVs, vans and light trucks, and automotive parts threaten to impair national security.
According to Secretary Ross’ statement, imports of passenger vehicles have grown from 32 percent to 48 percent in the past 20 years; and employment in motor vehicle production declined by 22 percent from 1990 to 2017. A Wall Street Journal article indicates that the president is considering the imposition of tariffs as much as 25 percent.
The Federal Register notice outlines a comment and hearing process for interested parties to submit/present information pertinent to the investigation. to see additional details, click below.
On Dec. 13, 2019, USTR announced that the U.S. had reached a phase-one trade agreement with China in areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The agreement also includes China’s commitment to purchase U.S. goods and services. More information can be found in the fact sheet.
We have continued to follow this important issue and provide updates. Click below to read the latest.
Temporary exemptions, originally expired May 1, were extended one more month to: Canada, Mexico, and members of the EU. As of May 4, agreements “in principle” were made with Australia, Argentina and Brazil. South Korea re-negotiated KORUS for exemption from tariffs in exchange for market access to US automakers and steel quota.
Customs and Border Protection began collecting the tariffs on March 23, 2018.
The President’s decision are the result of an investigation conducted by the U.S. Department of Commerce as part of Section 232 of the Trade Expansion Act of 1962 which ensures that industries and products critical to national security are not seriously damaged or destroyed by imports. The report can be found here.
On March 12, 2018, the Auto Care Association sent a letter to the administration expressing concern that the Section 232 tariffs will have unintended negative consequences on the U.S. economy and the auto care industry.
On September 30, 2018, the United States, Canada and Mexico reached a new trade agreement to replace NAFTA right before the U.S.-imposed Sunday deadline. NAFTA is still in effect while the new agreement, called the United States-Mexico-Canada Agreement (USMCA), goes through Congressional review. The timing allows outgoing Mexican President Enrique Peña Nieto to sign the USMCA prior to him leaving office.
“We are encouraged to see the United States reach a trilateral trade agreement with Mexico and Canada, allowing duty-free movement of auto parts to continue between the three countries. As we continue to review the text, we hope the modernized agreement strengthens trade in the region and promotes consistency and predictability for U.S. auto manufacturers, distributors, retailers and service providers,” said Bill Hanvey, president and CEO, Auto Care Association.
We’ve outlined a few key provisions relevant to the auto care industry. Please review the full text of the trade agreement for details, and click below to learn more.
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