Markets

Trump hints at new vehicle tariffs after GM closures, job cuts

Trump hints at new vehicle tariffs after GM closures, job cuts

In the wake of General Motors' announcement Monday that it plans to close three assembly plants in the US and lay off thousands of workers, President Donald Trump threatened on Twitter Wednesday that he could increase import taxes on passenger cars to match those levied on trucks.

A similar tariff on vehicle imports would mean "many more cars would be built here" and "GM would not be closing their plants in Ohio, Michigan & Maryland", he tweeted.

For Mr Trump in particular, the cuts are a blow, as he has made rebuilding the U.S. auto industry one of his administration's priorities.

The "chicken tax" or "chicken tariff" the President mentioned in his tweet was imposed by the U.S. in the 1960s in response to a tariff by some European countries on American poultry exports.

The United States now imposes a 2.5 per cent import tariff on all overseas manufactured cars.

"As the President has repeatedly noted, China's aggressive, State-directed industrial policies are causing severe harm to U.S. workers and manufacturers", Lighthizer said.




Trump departed midday for a summit of world leaders in Argentina, where he is set to meet with Chinese President Xi Jinping to discuss a widening trade war between Washington and Beijing. "We are continuing to raise these issues with China".

U.S. Trade Representative Robert Lighthizer will "examine all available tools to equalize the tariffs applied to automobiles", he said in a statement released Wednesday.

GM did not directly comment on Mr Trump's tweets, but reiterated it was committed to investing in the US.

The tweet came after GM announced plans this week to cut 14,000 jobs and shut five facilities in North America, dealing a blow to the President's promise to help auto workers.

Trump said it was "highly unlikely" he'll accept China's request to postpone the tariff hike, which will take effect on January 1, 2019.

China now imposes a 40 percent tariff on USA automobiles, while the United States has a 27.5 percent tariff on Chinese vehicles. In his State of the Union speech he celebrated it as the first in decades, although General Motors, Toyota, Honda, BMW, Mercedes-Benz, Hyundai and Volkswagen built plants in the U.S.in recent years, USA Today reported.


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