WASHINGTON — President Donald Trump ordered U.S. Trade Representative Robert Lighthizer to “examine all available tools to equalize the tariffs applied to automobiles” built here and sold in China, Lighthizer said in a statement Wednesday, describing China’s 25% hike on American imports as “egregious.”
“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.
China raised its tariff on U.S.-built cars from 15% to 40% in July, days after the Trump administration raised levies on imported steel and aluminum. The current U.S. rate on cars imported from China is 27.5%. The latest figures from Autodata suggest about 71% of the cars sold by all Asian manufacturers stateside are built in North America, as are about 69% of those OEMs’ light trucks.
The light trucks category includes SUVs, which are not subject to the 25% “chicken tax” enacted against foreign manufacturers in the 1960s. Applied specifically to light trucks and work vans — and, initially, to other, nonautomotive goods — the Johnson administration levied the chicken tax in retaliation for European tariffs on American-grown poultry.
In a series of tweets Wednesday, Trump tied the Chinese tariff imbalance to General Motors’ plant closures and suggested a chicken tax on China-built vehicles was overdue. Trump is set to dine privately with President Xi Jinping on Saturday in Buenos Aires, which will host the upcoming G20 summit.
“The reason that the small truck business in the U.S. is such a go-to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country. It is called the ‘chicken tax,’” Trump tweeted. “If we did that with cars coming in, many more cars would be built here … and GM would not be closing their plants in Ohio, Michigan & Maryland. … Also, the countries that send us cars have taken advantage of the U.S. for decades.
“The President has great power on this issue — Because of the G.M. event, it is being studied now!” Trump added.
Originally posted on Auto Dealer Today