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China and Japan condemn Trump auto tariffs move

The US administration has launched an investigation into whether tariffs are needed on the import of vehicles.

Donald Trump

China and Japan have condemned the Trump administration’s decision to investigate whether tariffs are needed on imports of vehicles and automotive parts into the US.

China’s Commerce Ministry said Beijing would “firmly defend” its rights and interests against what it called an abuse of national security provisions in trade.

In Tokyo, trade minister Hiroshige Seko said Japan, which accounts for about 40% of US vehicle imports, will continue to remind US officials that any trade measures must conform to the rules of the World Trade Organisation.

If such a measure is taken, “it would be an extremely far-reaching trade sanction that would put the global market into turmoil”, Mr Seko said. “We are extremely concerned.”

President Donald Trump invoked a provision authorising the president to restrict imports and impose unlimited tariffs on national security grounds, known as Section 232 of the Trade Expansion Act of 1962.

The move comes as talks with Canada and Mexico over the North American Free Trade Agreement have stalled.

In Beijing, Commerce Ministry spokesman Gao Feng told reporters that abusing national security provisions would “undermine the multilateral trade system and disrupt the order of international trade”.

“China will pay close attention to the progress of the US investigation, conduct a comprehensive assessment of the possible impact and firmly defend our legitimate rights and interests,” he told a news conference.

Japanese car makers did not issue individual comments but referred to Global Automakers, based in Washington, an industry group of international firms that includes the Japanese.

Global Automakers chief executive John Bozzella said the move would hurt American consumers.

“The US auto industry is thriving and growing. Thirteen, soon to be 14 companies, produced nearly 12 million cars and trucks in America last year.

“To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”

Last week Japan went to the World Trade Organisation to warn of possible retaliation for tariffs on steel and aluminium, which Mr Trump imposed in March.

Japan is the only major US ally that was not granted a temporary exemption from the tariffs. Japan estimates they will cost it about 50 billion yen (£340 million) a year.

China is a relatively minor player in the US vehicle import market, ranked 10th in dollar terms, but its massive car industry is eager to expand abroad. In auto parts exports to the US, China was ranked second last year.

Mexico is the top exporter of passenger vehicles and light trucks to the US followed by Japan, Canada, Germany and South Korea, according to the Department of Commerce.

A source said the president has suggested seeking new tariffs of 20% to 25% on vehicle imports.

Critics fear other countries will retaliate with trade sanctions of their own and question whether the move would ever be effective given the lengthy review required and legal challenges ahead.