Alabama Senator Takes Issue with Trump Administration’s Proposed Automotive Tariffs

Alabama Senator Doug Jones said he is “mystified” by the Trump administration’s suggestion that slapping tariffs on cars and car parts might be good for national security. Instead, the freshman Democrat said, Trump’s approach threatens jobs, including those in Alabama.

Jones, during his weekly call with the media on June 7, said that he has become “increasingly concerned with …the mini tariffs that the president has announced and reciprocal actions by other nations including friends and allies.” Jones said that of all of Trump’s talk of tariffs, “ Most troubling to me is the newly announced tariffs on the automotive industry… because we have such a growing automotive industry.”

Jones was taking issue with the Trump administration’s investigation into whether automotive imports are dangerous for the nation’s security.Jones, along with Sen. Lamar Alexander, a Tennessee Republican, jointly sent Commerce Secretary Wilbur Ross a letter earlier, urging him to drop the notion that the automotive trade as it stands might threaten national security. Commerce is investigating, under the seldom-used Section 232 of the Trade Expansion Act of 1962, whether imports of cars, trucks, and parts threatens national security.

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In his talk with reporters, Jones said that proposing “a 25 percent tariff on imported cars trucks and automotive parts is very concerning to me. The impact of these tariffs have potential to have a devastating effect on Alabama’s economy and the jobs that the automotive industry has created in Alabama in recent years.

“Employment in Alabama’s automotive manufacturing sector is approaching 40 thousand jobs and motor vehicle exports topped $7.75 billion in 2017… These numbers don’t include the new Toyota-Mazda plant which was just announced this year, which will add another 4, 000 jobs and 1.6 billion in economic development, ” he said, noting that Alabama, with Toyota, Mercedes, Honda, Hyundai and Mazda, is now the third largest auto exporter in the country, behind Michigan and South Carolina.

“These developments over the last 20-something years have been a real boon for our state, ” he said. “The growing industry has driven state and local leaders to push for workforce development measures to fill the growing demand for skilled manufacturing jobs and encourage auto companies to continue to invest in the state of Alabama.”

Jones, pointing out that the president himself touted the announcement of the Toyota-Mazda plant in his State of the Union address, said he hoped to remind Trump of his commitment to bring manufacturing back to the U.S. “I wholeheartedly agree with him on the goal of expanding manufacturing. Hurting the current Alabama employers is not the way to do it, ” he said.

“On top of the threat to the economy, the tariffs will have the unintended consequences of being passed on to the consumer. It has been said by a number of commentators that tariffs like this are simply a tax on the consuming public. The automotive industry has become one of the leading job creators in our state, so I can’t just sit by while the president’s really, I believe, short-sighted proposals threaten good paying jobs across Alabama. I’m urging him to reconsider going down this path.”

In their letter to the Commerce secretary, Jones and Alexander raised a bipartisan alarm to what they consider a threat to the economic health of both their states, each with significant involvement in the automotive sector.

“Auto manufacturers and suppliers employ nearly 200, 000 of our constituents and that number is growing, ” they wrote. “These are good jobs employing American workers. Over the past several years the automotive industry, including foreign manufacturers, has invested billions in our states and created thousands of jobs.

“However, as a result of the Department’s investigation, automotive companies are currently facing the threat of direct and retaliatory tariffs, which could mean hundreds of millions of dollars of additional costs. To absorb these costs, automotive companies in our state could be forced to either raise prices or cut costs. Either scenario directly translates into lost jobs for our constituents.

“The Administration’s 232 investigation centers on the national security impact of the automotive industry in the United States. We can assure you that reducing the size of our state’s automotive manufacturing base will not bolster our nation’s security.”

Automotive News pointed out in a story June 5 that Ross justified the Section 232 review on grounds that economic security essentially equals national security.

In a letter to Defense Secretary James Mattis, Ross said that “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry… The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.” 

A Commerce announcement contended that “During the past 20 years, imports of passenger vehicles have grown from 32 percent of cars sold in the United States to 48 percent.   From 1990 to 2017, employment in motor vehicle production declined by 22 percent, even though Americans are continuing to purchase automobiles at record levels.  Now, American owned vehicle manufacturers in the United States account for only 20 percent of global research and development in the automobile sector, and American auto part manufacturers account for only 7 percent in that industry.  

“Automobile manufacturing has long been a significant source of American technological innovation. This investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States, including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies.”

The Commerce position has been rejected by a number of industry groups and researchers. Jones added his voice to the chorus today.

“I’m as mystified as everyone else, ” Jones said, in his media call, “as to how the automotive industry is affecting national security at this point.”

Noting that the auto industry is generally growing, Jones questioned why the administration is “now looking at imposing tariffs on allies, who are not cheating. They are not doing anything wrong. It is a competitive industry…. A lot of these companies that import into the United States are also manufacturing here in the United States. They are as much a part of the U.S. auto industry as GM and Ford these days. I have yet to see how this is a threat in any way to national security.

“What the president seems to be doing is using a very rarely used process … to really just, I don’t know. In all candor, it seems to be just a lot of political messaging leading up to midterms… If history is any judge, they’re going to walk back a lot of these things. What troubles me is that they are holding the threat of American jobs hostage in doing this… Just by announcing these tariffs it has effects on the market and it freezes the automotive industry because they don’t know if they can expand, whether they’re going to have to lay off and consumers are not going to know whether or not there are going to be higher prices.” 

Nick Patterson

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