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Automobiles, Auto Parts Could Face Increased Tariffs, Quotas from New 232 Investigation

Thursday, May 24, 2018

Tariffs, quotas, and/or other restrictions on a wide range of imported automobiles and auto parts could be imposed as a result of the Trump administration’s latest trade enforcement effort.

The Department of Commerce has self-initiated an investigation under section 232 of the Trade Expansion Act of 1962 to determine whether imports of automobiles, including SUVs, vans, and light trucks, as well as auto parts, are harming U.S. national security. A DOC press release explains that auto manufacturing has long been a significant source of U.S. technological innovation and that the 232 investigation will therefore consider whether the decline of domestic automobile and auto parts production threatens to weaken the internal economy of the U.S., 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 DOC notes that U.S.-owned vehicle manufacturers in the U.S. account for only 20 percent of global research and development in the automobile sector and U.S. auto part manufacturers account for only seven percent in that industry.

If the DOC (which must consult with the Department of Defense) finds that excessive foreign automobile and auto parts imports are a threat to U.S. national security, and the president concurs, the president has the authority to adjust imports, including through the use of tariffs and quotas. Any such actions would be imposed within 15 days of the president’s determination to act.

The DOC has up to 270 days to conclude a section 232 investigation and submit its report and recommendations to the president. A hearing date and request for public comments is expected to be published shortly in the Federal Register.

For more information on this section 232 investigation and how it may affect your business, please contact Kristen Smith at (202) 730-4965 or David Craven at (312) 279-2844.

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