Trump administration launches vehicle import probe

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Trump administration launches vehicle import probe

Trump has instructed US Commerce Secretary Wilbur Ross to consider initiating an investigation under Section 232 of the 1962 Trade Expansion Act to find if tariffs or other restrictions were needed on imported cars, after he met him at the White House to discuss the current state of US automobile industry.

"There will be big news coming soon for our great American Autoworkers", tweeted Mr. Trump.

Economists worry that increased trade protections, like tariffs, could spark trade wars and harm the USA economy.

Trump has frequently lambasted China's high import duties on foreign cars.

What Happened: Citing national security reasons, U.S. President Donald Trump's administration is considering new tariffs of up to 25 percent on imported vehicles, The Wall Street Journal reported May 23. The provision authorizes the president to restrict imports and impose unlimited tariffs on national security grounds.

The Trump administration took the better part of a year to complete the investigation into steel and aluminum.

Under the law, the Commerce Department conducts a months-long review and reports its conclusions to the president. It is unclearif the new tariffs would focus on certain countries or all importedvehicles.

The threat of tariffs could also be a useful bargaining chip, as the USA tries to negotiate new trade agreements with Japan, Mexico, Canada, and the European Union.

According to government statistics, in 2017 the United States imported 8.3 million vehicles worth $192bn (£144bn), and exported nearly 2 million vehicles worth $57bn (£43bn). Mexico is resisting the change, creating a major impasse. At the same time, the United States exported almost 2 million vehicles worldwide worth $US57 billion. Trump said in the tweet. "You'll be seeing very soon what I'm talking about".

In March, he threatened to hit European carmakers with tariffs if the European Union did not lower barriers to US vehicles.

The president signaled earlier Wednesday on Twitter that an important announcement was imminent to help the US car-manufacturing industry.

"They make it impossible for our cars (and more) to sell there".

Trade experts have warned that the use of Section 232 opensthe door to possible retaliation from other countries and violates global trade rules.

"If the European Union wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.", Trump wrote on Twitter in March.

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