Trump's Talk of U.S. Auto Tariffs Sends Carmakers' Stocks Tumbling

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"There is evidence suggesting that, for decades, ..."

Associate professor Sui Sui of Ted Rogers School of Management at Ryerson University says the tariffs could be devastating on Canada, but she doubts the US will go through with them because the North American industry is so intertwined it would hurt the USA just as much.

"We will closely monitor the situation under the USA probe and fully evaluate the possible impact and resolutely defend our own legitimate interests". America's capacity to churn out cars hasn't been "a meaningful driver of national security" for the us since World War II, Clayton Allen Height Capital Markets analyst said in a client note.

German officials have grown frustrated trying to convince Trump that Germans don't want to buy from American companies, which specialize in large sport-utility vehicles rather than smaller cars more suited to European lifestyles.

Trump's frosty trade relations with Asian countries, China, in particular, is continuing.

It said German auto exports to the USA have been falling for many years, whereas German automakers have moved production for more of their vehicles to U.S. plants, where they are exported all over the world. If investors were taking the president seriously, one would expect a much larger reaction, given that Toyota, for instance, sells more cars in North America than even its than even its home base of Japan, as its projected to sell roughly 2.4 million cars in the USA this year alone. US auto sales fell 2 percent a year ago after hitting a record high in 2016.

The department's release said imports had grown from one-third to nearly one-half of all cars sold in the USA in the last 20 years.

"An increase in tariff barriers should be avoided", the body said, saying it had "always spoken out in favor of mutual reductions in tariffs and for free-trade agreements".

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But automakers' advocates argue that domestic production remains strong.

He added, "Core industries such as automobiles and automotive parts are critical to our strength as a Nation".

Both countries are part of the North American Free Trade Agreement (Nafta), which the Trump administrations wants to renegotiate in a bid to boost the U.S. manufacturing sector.

The auto industry and consumer groups can be expected to descend on Capitol Hill to attack the import fees, and Congress could further push back against the White House's unilateral moves - especially in light of the weak national security claim for vehicles.

"One-sided protectionism has never helped anyone in the long term. This path leads inevitably to fewer choices and higher prices for cars and trucks in America", he said in a statement.

A Toyota spokeswoman said that the company was monitoring the situation. The EU executive said it would be against the rules of global trade. This week's notice did not single out any country or automotive brand as a target. In Japan and South Korea, Nissan (nsany) fell by 1.8%, Toyota (tm) by 3%, and Hyundai (hymtf) by 3.1%. Last year, £171 billion worth of cars were exported from the European Union, with the United States the destination for 25% of them. The biggest exporters of auto parts were Canada, Mexico, China, Germany and Brazil. At the same time, the United States exported almost 2 million vehicles worldwide worth $57 billion.

The German automakers Volkswagen AG, Daimler AG and BMW AG all have large USA assembly plants.

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