Published: Tue, July 03, 2018
Finance | By Jaime Brady

Toyota rejects Trump reasoning behind proposed vehicle tariffs

Toyota rejects Trump reasoning behind proposed vehicle tariffs

"Increased import tariffs could lead to a smaller G.M., a reduced presence at home and overseas for this iconic American company, and risk less - not more - U.S.jobs", General Motors wrote in a statement given in response to Trump's plan. President Trump has ordered that department to investigate imported cars and vehicle parts as a national security threat, which could lead to new tariffs.

And Toyota Motor North America said the tariffs "would have a negative impact on all manufacturers, increasing the cost of imported vehicles as well as domestically produced vehicles that rely on imported parts" - such as the company's Kentucky-built Camry.

Toyota Motor filed separate comments opposing the tariffs on Friday saying they would "threaten U.S. manufacturing, jobs, exports, and economic prosperity". In turn, that likely would dent vehicle demand, which could lead to job losses at auto makers and parts suppliers, GM said.Other major auto makers joined GM in comments to the department, including Toyota Motor Co.

The exemption, however, was revoked in May when Trump levied a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, provoking those allies to respond with retaliatory trade measures.

The Trump administration has said the confrontational posture is needed to address trade agreements that have harmed the U.S. and cost jobs.

Although GM remains committed to the American market, where it operates 47 manufacturing facilities and 25 service part facilities, employing over 100,000 Americans, tariffs undermine the automaker's ability to compete globally. It buys tens of billions of dollars' worth of parts from US suppliers every year, and has invested over 22 billion dollars in USA manufacturing operations since 2009.

America's largest carmaker has added its voice to the chorus of companies and countries criticising proposed USA tariffs on foreign cars and auto parts.

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"At some point, this tariff impact will be felt by customers", GM said. GM plans to combine "proprietary battery technology, a low-priced, flexible vehicle design and high-volume production mainly in China", Reuters reports, citing six current and former GM and supplier executives and six industry experts.

Its comments echoed those from two major United States auto trade groups on Wednesday, when they warned that tariffs of up to 25 per cent on imported vehicles would cost hundreds of thousands of auto jobs, dramatically raise prices on vehicles and threaten industry spending on self-driving cars.

Both GM and Toyota warned that US consumers would bear the brunt of increased costs.

GM's Chevrolet Silverado pickup was the top-selling model imported from Mexico a year ago, while the Chevrolet Equinox crossover was the leading vehicle sourced from Canada, according to LMC Automotive. "Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted".

So with midnight tonight being the deadline for comments, Commerce Secretary Wilbur Ross said in a statement, "We have received approximately 2,500 comments already" adding they expect more.

Trump threatened last week to impose a 20 percent tariff on auto imports in an attempt to leverage European Union leaders to seek trade talks with the U.S.

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