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Greenville Business Magazine

Auto Industry to Oppose Trump Tariffs at Commerce Dept

Jul 19, 2018 08:36AM ● By Chris Haire

The Auto Alliance outlines the positive impacts of global trade on the U.S. on the trade organization's website

Both domestic and foreign automakers are pushing back against the Trump administration's proposed tariffs targeting overseas manufacturers.

At the Commerce Department today, a representative of the Alliance of Automobile Manufacturers, a lobbying group representing Ford, GM, BMW, Toyota, Volvo, and most other major car companies, is expected to deliver a speech condemning the tariffs, which will increase the price of foreign-made vehicles by 25 percent.

"We appreciate the desire to strengthen our trade agreements to better achieve a level playing field in the global marketplace, but tariffs are the wrong approach," Jennifer Thomas, vice president of federal government affairs at the Alliance of Automobile Manufacturers, says in a prepared statement previewing her testimony.

"The opposition to this investigation is widespread and deep because the damaging consequences are alarming. Higher auto tariffs will harm American families and workers, along with the economy," Thomas says. "Simply put, auto tariffs are a massive tax on consumers."

"Industry analyses show that a 25 percent tariff would raise the price of an imported car nearly $6,000 and the price of a U.S.-built car $2,000," she adds. "This would equate to an $83 billion tax on U.S. consumers that would trigger a domino effect on the industry and economy. When vehicle prices rise, demand drops. Lower demand means less production.

"And when production declines, job losses follow. A Peterson Institute analysis projects a job loss of about 200,000, and if other countries retaliate with tariffs, American job losses would reach more than 600,000--that’s almost 10 percent of auto jobs in this country."

On more than one occasion, the president has singled out German manufacturers Daimler AG and BMW, a move which has baffled many in the Palmetto State considering the two Deutschland giants have sizable South Carolina operations.  

Today, the New York Times ran an article on the Spartanburg County BMW plant and the concerns of those in the area. The Times reports:

"The Spartanburg plant is BMW’s biggest in the world. It has helped draw more than 200 companies from two dozen countries to Spartanburg County. And the German company — not an American icon like Ford or General Motors — is now the largest exporter of cars made in the United States, turning the port of Charleston, S.C., into a hub for global trade.

But by setting off a global trade battle, President Trump is threatening the town’s livelihood. People aren’t happy.

'BMW saved Spartanburg and transformed South Carolina into a manufacturing mecca to the world,' said [David Britt] a member of the County Council. 'When you mess with the golden goose, they’re family, and you’re messing with me.'"

Given that sentiment, it should come as no surprise that the Upstate Chamber Coalition also opposes the proposed tariffs. 

"With South Carolina having a strong export economy, it's no surprise that we stand to lose quite a bit from an emerging trade war with China Canada, Mexico, and the European Union," UCC notes. 

"The U.S. Chamber estimates these tariffs will have a $3 billion economic impact on our state, the 8th highest in the U.S. Per capita, South Carolina has the 5th highest impact in the U.S."

UCC adds, "The U.S. Chamber, the S.C. Chamber and numerous local chambers and business organizations across the country are urging Congress to take action."

Last week, UCC says, "the Senate approved a resolution 88-11 that would give Congress a role in approving tariffs that could threaten national security, like the steel and aluminum tariffs that are already in effect, and proposed tariffs on automobiles. Senators Lindsey Graham and Tim Scott voted against the resolution."

Last month, BMW responded to Trump's tariff threats.

"BMW has been a committed corporate citizen in the U.S. for more than a quarter-century," says Kenn Sparks, head of corporate communications for BMW of North America, LLC. "We honor and fulfill our commitments, especially to the more than 70,000 Americans whose jobs and careers we support and sustain, some 10,000 of whom are at our South Carolina plant."

"As a global company, the BMW Group is committed to free trade worldwide.," Sparks adds.
"Free trade is the basis for the $9 billion dollar investment BMW has made to date in our South Carolina plant, which is now our largest in the world, and the highest value exporter of vehicles from the U.S. to more than 130 countries around the world.”