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Trump postpones decision on auto tariffs for 6 months

IANS  |  Washington 

The US 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 and Japan, the said in a statement.

Although 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 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 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 said.

"The negotiation process will be led by Representative Robert Lighthizer and, if agreements are not reached within 180 days, the 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 negotiations.

But the 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 has hit with an increase in tariffs from 10 per cent to 25 per cent on $200 billion worth of Chinese goods and 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 of the Senate's Finance Committee, Republican Chuck Grassley, to demand that the provide him with the Commerce Department's report.

The has refused the request.

On Friday, Grassley said on that the decision to postpone a decision on auto tariffs was a wise move.

Last year, Trump posed a 25 per cent on imports of and a 10 per cent on imports of aluminum from the EU, China, Canada, Mexico, 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 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 carries out its threat.

Separately, 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, wants "fair and more equitable trade in the motor vehicle sector," including provisions designed to increase production and jobs in the US.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, May 18 2019. 09:04 IST