U.S. launches automatic import probe, China says it will defend interests

WASHINGTON (Reuters) – The Trump administration launched a national security investigation into imports of cars and trucks that could lead to new US tariffs similar to those imposed on steel and aluminum imported in March.

The national security investigation under Section 232 of the Trade Expansion Act of 1962 would investigate whether imports of vehicles and parts threatened the health and capacity of the industry to investigate and develop new advanced technologies, the Department of Commerce said on Wednesday. .

"There is evidence to suggest that, for decades, imports from abroad have eroded our national automotive industry," Commerce Secretary Wilbur Ross said in a statement, promising a "thorough, fair and transparent investigation."

Higher tariffs may be particularly painful for Asian automakers, including Toyota Motor Corp, Nissan Motor Co, Honda Motor Co and Hyundai, which have the United States as a key market, and the announcement caused a wide wave of sales of actions of automobile manufacturers in the region. [MKTS/GLOB]

The governments of Japan, China and South Korea said they would monitor the situation, while Beijing, which increasingly looks to the United States as a potential market for its cars, said it would defend its interests.

"China opposes the abuse of national security clauses, which will seriously damage multilateral trading systems and disrupt the normal international trade order," said Gao Feng, spokesman for the Ministry of Commerce, at a regular press conference in Beijing on Thursday that largely on whether it is making any progress in its trade dispute with Washington.

"We will follow the situation closely under the investigation of the United States and we will fully evaluate the possible impact and resolutely defend our own legitimate interests."

COURT VOTERS

The investigation comes as Trump judges voters in the industrial heart of the United States. of the midterm elections at the end of this year, and opens a new front in its "America Primero" trade agenda, aimed at reducing jobs in the manufacturing industry lost by competitors abroad.

It could increase costs for automobile manufacturers abroad to export vehicles and parts to the second largest automotive market in the world.

Growing commercial tensions over cars and auto parts, particularly with China, could increase the risks that US companies have. UU Expand your presence in the country, signs that are already emerging.

Earlier this month, Reuters reported that vehicles imported from Ford Motor Co ( FN ) were being held in Chinese ports, which added to a growing list of US products facing problems in the borders of China.

Most vehicles sold in the United States by Japanese and South Korean automakers are produced there, but most also export to the United States from plants in Asia, Mexico, Canada and other countries.

Approximately one third of all imports of EE vehicles. UU Last year they were from Asia.

In addition to the recently imposed 25% steel tariffs and the 10% tariffs on aluminum imports, the administration has threatened tariffs on Chinese products worth 50 billion dollars for intellectual property claims , and Beijing promised to respond.

The administration is also trying to renegotiate the North American Free Trade Agreement to return more automobile production to the United States.

Commerce said the new research would determine whether lost domestic production had weakened the "internal economy" of the United States. UU And its ability to develop connected vehicle systems, autonomous vehicles, fuel cells, electric motors and batteries and advanced manufacturing processes.

In a separate statement, President Donald Trump said: "Basic industries like automobiles and auto parts are fundamental to our strength as a nation."

A Trump administration official said before the announcement that the expected move aimed in part to pressure Canada and Mexico to make concessions in the talks to update the NAFTA that They languished partly on automotive supplies, as well as putting pressure on Japan and the European Union, which also export large quantities of vehicles to the United States.

& LESS PRICES, GREATER PRICES & # 39;

An ad hoc industrial group representing the largest Japanese, German and foreign car manufacturers called "Here for America" ​​criticized the effort.

"As far as we know, nobody is asking for this protection, this road inevitably leads to fewer options and higher prices for cars and trucks in the United States," said John Bozzella, executive director of Global Automakers, a trade group that represents Toyota, Nissan Motor Co Ltd ( 7201.T ). Hyundai Motor Co ( 005380.KS ) and others, who also speak for the larger group.

A Toyota spokeswoman said the company was monitoring the situation.

Chinese automaker Geely Holding Group urged free trade practices for the automotive industry, which is based on a complex supply chain in which the vehicle components for a given vehicle often come from many countries .

"As a global manufacturer, Geely Holding Group is in favor of free trade and open markets, free trade creates jobs, wealth and economic growth," said a spokesman, adding that its plant in South Carolina to produce its Volvo brand automobiles demonstrated its commitment to the country.

At the end of last week, the Japan Automobile Manufacturers Association urged its export partners to keep tariffs on vehicles and components low and maintain free trade relations.

Approximately 12 million cars and trucks were produced in the United States last year, while the country imported 8.3 million vehicles worth $ 192 billion. This included 2.4 million from Mexico, 1.8 million from Canada, 1.7 million from Japan, 930,000 from South Korea and 500,000 from Germany, according to statistics from the US government.

At the same time, the United States exported almost 2 million vehicles worldwide worth $ 57 billion.

The German automakers Volkswagen AG ( VOWG_p.DE ), Daimler AG ( DAIGn.DE ) and BMW AG ( BMWG.DE ) have all the EE UU Big. badembly plants. The United States is the second export destination for German automakers after China, while vehicles and auto parts are Germany's largest source of export earnings.

When asked if the measures would affect Mexico and Canada, a Mexican source close to the NAFTA talks said: "That is probably the next battle."