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January 15, 2019

Senators Jones and Alexander Re-introduce Bipartisan Legislation to Delay Auto Tariffs

The Automotive Jobs Act mandates a study of the impact on the automotive industry before tariffs could be imposed

Washington, D.C. — U.S. Senators Doug Jones (D-Ala.) and Lamar Alexander (R-Tenn.) today re-introduced their Automotive Jobs Act legislation, a which would delay President Trump’s proposed 25-percent tariff on imported cars, trucks, and auto parts. In May 2018, the President directed the U.S. Commerce Department to initiate a Section 232 investigation to determine whether imported automobiles, trucks, and parts are a threat to U.S. national security and to subsequently levy tariffs. The Commerce Department is expected to finish its investigation and make its recommendation to the President in February. The Jones-Alexander legislation would require the International Trade Commission (ITC) to conduct a comprehensive study of the well-being, health, and vitality of the United States automotive industry before tariffs could be applied.

“Automobile tariffs are nothing but new taxes on American consumers and only serve to threaten an industry that is vital to Alabama’s economy and supports 57,000 good jobs,” said Senator Jones, who heard concerns from representatives of all four Alabama automakers during a roundtable discussion in Mobile this fall. “As the son of a steelworker, I know well that there is a need to address the bad actors like China who’ve taken advantage of us on trade and I share the President’s goal of reviving our domestic manufacturing industry. However, that should be done in a way that doesn’t hurt other major job-creating industries and increase costs for American consumers. By having a deeper look at the state of the auto industry, an ITC study would shed light on the impacts that tariffs would have and would make it undeniably clear to the President that this industry is not a national security threat.”

“This bill would delay the administration’s proposed 25 percent tariff on automobiles and automotive parts imported into the United States until the President has a second opinion from the International Trade Commission about the effect those tariffs would have on the more than 7 million jobs in the American automotive industry,” said Senator Alexander. “About 136,000 of those auto jobs are in Tennessee, one third of our state’s manufacturing jobs. The president has gotten the world’s attention with his tariffs, but what deserves more attention is his long term solution – zero tariffs, zero barriers, which is, as the president said is, ‘the way it should be.’ Taking steps in the direction of reciprocity—insisting that other countries do for us what we do for them—rather than a trade war, will be much better for the American worker.”

Senators Jones and Alexander first raised their concerns in a letter to U.S. Department of Commerce Secretary Wilbur Ross urging him to reconsider the tariffs. Their legislation addresses the key points the senators raised in their letter to Secretary Ross.

As part of the mandated study, the ITC would be required to assess, among other things:

  • The number of automobiles assembled in the United States that are exported each year and to which countries;
  • The percentage of component parts of automobiles assembled in the United States that are imported;
  • The number of component parts for automobiles that are not produced in the United States and would thus not be available to United States automotive producers if prohibitively high duties were imposed on imports of those parts; and,
  • The effect an increase in automotive manufacturing costs would have on jobs in the United States.

The ITC would be required to deliver the report to Congress and is to include policy recommendations based on the study. Under this legislation, these tariffs cannot be applied until the report is delivered.

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