At a meeting at the White House on Friday, President Donald Trump asked the representatives of the world’s top automakers to start building cars in the U.S. and export it to other countries. He said that his administration is working towards reducing gas mileage and pollution requirements enacted during the previous administration.
Trump also proposed a 20 percent tariff on imported cars, which would be subject to Obama-era emissions regulations.
A few months back, President Trump had warned that cars from the European Union could face tariffs if the EU retaliates against U.S. duties on steel and aluminum imports. Experts opine it would be difficult to enact extra tariffs on car imports without violating World Trade Organization rules.
As per the norms of U.S Customs and Border Protection, cars imported to the U.S. are subject to 2.5 percent tariffs, with trucks subject to 25 percent tariffs, unless the U.S. has a free-trade agreement with the country exporting the vehicles.
In March, Trump threatened E.U. that if they want to increase their already massive tariffs and barriers on American companies doing business there, the U.S. will start levying taxes on cars being exported from Europe.
“It would be quite severe if we were to face additional import duties to ship the cars into the U.S. — the Germans, in particular, are very, very exposed,” Arndt Ellinghorst, the head of global automotive research for advisory firm Evercore ISI, told CNBC.
President Trump said that his administration will soon start formulating standards for environmental controls and fuel efficiency standards.
— The Sacramento Bee (@sacbee_news) May 12, 2018
Lauding the efforts of Sergio Marchionne, the chairman and chief executive of Fiat Chrysler, Trump said, “Right now he’s my favourite man in the room.” Fiat will be moving its plants from Mexico to Michigan.
According to a recent report by Bloomberg, representatives of the world’s biggest carmakers, including GM CEO Mary Barra, Ford CEO James Hackett, Fiat Chrysler CEO Sergio Marchionne, and Rick Schostek, executive vice president of Honda North America Inc were present at the meeting. Transportation Secretary Elaine Chao, Environmental Protection Agency Administrator Scott Pruitt, U.S. Trade Representative Robert Lighthizer, and economic adviser Larry Kudlow were also present.