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Trump postpones decision on auto tariffs for 6 months
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IANS | 18 May, 2019
The US President has postponed
for six months a decision on whether to slap tariffs on imports of
automobiles and auto parts from trading partners such as the European
Union and Japan, the White House said in a statement.
Although
Donald Trump made the widely expected choice not to impose tariffs
immediately, the statement on Friday said he "took historic action" in
issuing a proclamation that directs the US trade representative to
negotiate agreements to address a national security threat that is
causing harm to the US automobile industry.
The statement said he
made his decision after extensively reviewing a report that the
Commerce Department had delivered to him on February 17, reported Efe
news agency.
That report concluded that imports of automobiles
and certain components could impair US national security because the
country's "defense and military superiority" depend on the
competitiveness of the national automobile industry and the research and
development it generates, the White House said.
"The negotiation
process will be led by United States Trade Representative Robert
Lighthizer and, if agreements are not reached within 180 days, the
President will determine whether and what further action needs to be
taken," the statement read.
Trump, who faced a Saturday deadline to make a decision, has provided relief to global markets by putting it off for 180 days.
Since
taking office in January 2017, Trump has defended tariffs as an
effective strategy for gaining influence in trade negotiations.
But
the President was warned by experts and the US auto industry that he is
running the risk of provoking new global trade confrontations at a time
when Washington has hit China with an increase in tariffs from 10 per
cent to 25 per cent on $200 billion worth of Chinese goods and Beijing
has threatened to retaliate soon with tariffs on $60 billion in US
imports.
The potential auto tariffs are strongly opposed by the
Congress, including political allies of Trump, and have prompted the
chairman of the Senate's Finance Committee, Republican Chuck Grassley,
to demand that the White House provide him with the Commerce
Department's report.
The Trump administration has refused the request.
On Friday, Grassley said on Twitter that the decision to postpone a decision on auto tariffs was a wise move.
Last
year, Trump posed a 25 per cent tariff on imports of steel and a 10 per
cent tariff on imports of aluminum from the EU, China, Canada, Mexico,
Russia and other countries, making the decision after the Commerce
Department found that those imports eroded the US's industrial base and
posed a threat to national security.
The Auto Alliance, a
Washington-based trade group comprising automobile manufacturers that
operate in the US, staunchly opposes tariffs on imports of vehicles and
auto parts.
"Imposing tariffs on imported vehicles and parts
would be a mistake, with significant negative consequences" for the auto
industry and its employees," it said in a statement this week.
The
EU also says it has drawn up a list of US products that could be
subject to retaliatory tariffs if the Trump administration carries out
its threat.
Separately, Japan's government said on Friday it is
confident the US will not put a cap on imports of Japanese automobiles
amid frictions between the two countries during negotiations to finalize
a bilateral trade agreement.
Among its negotiating objectives,
Washington wants "fair and more equitable trade in the motor vehicle
sector," including provisions designed to increase production and jobs
in the US.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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