The South Korean government
and automobile companies held a meeting Thursday to discuss how to respond to the
potential impact following reports of US President Donald Trump ordering an
investigation into automobile imports to see whether they threaten national
security.
The closed-door meeting was attended by senior officials from the Ministry of
Trade, Industry and Energy and executives from Hyundai Motor, Kia Motors, GM
Korea, Renault Samsung, Ssangyong Motor and Hyundai Mobis.
“We agreed to form a task force comprising the public and private sector to
monitor related trends in the US and the impact on the Korean automobile
industry,” said Park Jong-won, chief of the ministry’s automobile
division.
The task force comprises representatives from the government, five
automobile companies, car parts companies and the Korea Automobile
Manufacturers Association.
The move came after the US Commerce Department said Wednesday it launched an
inquiry that could allow the Trump administration to impose tariffs on auto
imports over national security concerns.
US Commerce Secretary Wilbur Ross announced he initiated a so-called Section
232 investigation on auto trade -- which would provide the legal basis to impose
tariffs, if his department finds imports threaten US national security -- after
speaking with Donald Trump on the matter.
“There is evidence suggesting that, for decades, imports from abroad have
eroded our domestic auto industry,” Ross said.
“The Department of Commerce will conduct a thorough, fair, and transparent
investigation into whether such imports are weakening our internal economy and
may impair the national security.”
In a separate statement released by the White House, Trump said he had “instructed”
Ross to “consider” kicking off the probe.
“Core industries such as automobiles and automotive parts are critical to our
strength as a nation,” Trump’s statement said.
The Trump administration had used the same justification to slap steep tariffs
on steel and aluminum, raising the specter of a trade war.
A similar move in the auto industry would open yet another front in the
Republican president’s confrontational rows over trade that have drawn global
outcry from allies and partners.
The latest announcement comes as negotiations with Canada and Mexico over
revamping the continent-wide North American Free Trade Agreement have stalled
over auto demands.
Earlier Thursday, Trump had blamed the US neighbors to the north and south for
being “difficult” in talks to renegotiate the pact.
The Wall Street Journal reported earlier Wednesday that Trump was asking for
vehicle import tariffs as high as 25 percent.
Trump has frequently lambasted China’s high import duties on foreign cars.
During recent negotiations, President Xi Jinping offered to cut the rate to 15
percent from 25 percent.
The Journal, citing sources in the auto industry, said the US’ moves to
retaliate likely would face significant opposition from trading partners and
auto dealers that sell imports.
Japan was quick to lash out, with its Trade Minister Hiroshige Seko saying
Thursday that such a move would “plunge the world market into confusion” and be
“extremely regrettable.”
Passenger cars make up around 30 percent of Japan’s total exports to the United
States and Tokyo has already threatened Washington with retaliation at the
World Trade Organization for the steel tariffs.
In its statement announcing the inquiry, the Commerce Department cited figures
showing that US employment in automobile manufacturing had dropped by 22
percent from 1990 to 2017.
Trump appeared to hint at Wednesday’s announcement with earlier tweets, saying:
“There will be big news coming soon for our great American autoworkers.”
“After many decades of losing your jobs to other countries, you have waited
long enough!”
In another hint referring to trade talks with China, he said that, while the
discussions were proceeding nicely, “in the end we will probably have to use a
different structure.”
Trump -- whose protectionist platform helped launch him to the White House --
has repeatedly floated the notion of steep tariffs that would shield the US
auto industry.
He has specifically targeted Germany, and argued that American cars are slapped
with higher tariffs than those imposed on European automobiles.
US cars sold in the EU are hit with 10 percent duties, while the US imposes
just 2.5 percent on cars from the EU.
But Washington imposes 25 percent tariffs on European pick-ups and trucks --
which the EU taxes at a much lower 14 percent on average.