Next: Tariffs on imported cars?

Associated Press

DETROIT

Sometimes, on a bad night, Brad Strong wakes at 2 a.m. and can’t get back to sleep. The insomnia isn’t about his family or money or health. It’s about tariffs.

The Strong family’s three car dealerships in Salt Lake City could suffer a significant blow if President Donald Trump proceeds with a proposal to impose tariffs of 20 to 25 percent on imported autos and auto parts.

By Sunday, Trump’s Commerce Department is expected to issue an opinion on whether auto imports endanger U.S. national security enough to justify such import taxes. Trump would have 90 days to decide whether to impose them.

The department could decide to postpone its conclusion or make recommendations to Trump without making them public.

But if it does suggest imposing tariffs, Commerce would be advocating a major escalation in Trump’s combative trade policies, which so far have included tariffs on imported steel, aluminum, dishwashers, solar panels and hundreds of Chinese goods. The tariffs have become a financial burden for U.S. companies that import goods and parts and have led some to pass on their higher costs to customers.

U.S. auto tariffs would almost surely lead Japan and the European Union to retaliate. They could also spark a rebellion in the U.S. Congress – including from Trump’s fellow Republicans – over concern that he is raising tariffs by invoking his authority to label certain imports a threat to America’s national security.

“I don’t believe minivans from Canada or other allies are a threat to our national security,” said Republican Sen. Rob Portman of Ohio. “I hope the administration takes a step back and reconsiders any auto tariffs.”

The tariffs could have far-reaching consequences on the companies that make cars, often with imported parts; on the dealerships that sell them; and on the consumers who buy them. U.S. imports of passenger vehicles and auto parts amounted to $340 billion in 2017.

If 25 percent tariffs were imposed, the price of imported vehicles would jump more than 17 percent, or an average of $5,000 each, according to IHS Markit. Even the prices of vehicles made in the U.S. would rise by about 5 percent, or $1,800, because all use some imported parts.