General Motors Warns Trump’s Trade War Could Damage the Auto Industry, Cost Jobs

Last updated on: June 29, 2018 at 6:23 pm by Susan Wright

General Motors Warns Trump’s Trade War Could Damage the Auto Industry, Cost Jobs 2018-06-29T18:23:10-04:00 Susan Wright

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Trade wars are not easy to win, contrary to what has been pushed from the Trump White House.

In the real world, with people who actually understand how trade works, the warning has been repeatedly sounded, but our president would rather press ahead, crafting a world where he shares the stage with Communist dictators and ruthless strongmen. The whole MAGA thing is an afterthought, because in Trumplandia, MAGA happens when Trump is supreme leader. Even if he’s ruling over ashes, he’s still ruling, and that’s what matters, right?

Some of the fallout from President Trump’s trade war includes pork and soy bean farmers, who are already feeling the pinch.

Harley-Davidson, once a uniquely American brand, will now be moving part of their production out of the United States, in order to save their European market, destined to be sunk by stiff tariffs on steel and aluminum, and the retaliatory tariffs promised from the European Union.

Now another American company, General Motors, is warning that Trump’s trade war is going to cost car buyers, as well as the job market for auto manufacturers, in the near future.

According to a Reuters report:

The Trump administration in May launched an investigation into whether imported vehicles posed a national security threat, and U.S. President Donald Trump has repeatedly threatened to quickly impose a 20 percent import tariff on vehicles.

The largest U.S. automaker said in comments filed with the U.S. Commerce Department that overly broad tariffs could “lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs.”

GM, which makes some vehicles for the U.S. market in Mexico and Canada, said the tariffs could hike vehicle prices and reduce sales.

Even if automakers opted not to pass on higher costs “this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies,” GM said.

President Trump has been particularly harsh in his threats against imported luxury cars. While at a rally in South Carolina, recently, he slammed luxury auto maker, BMW, to a cheering crowd of supporters.

It was a case of cutting off your own nose to spite your face, it would seem. Just a few miles up the road from that rally was the largest employer in South Carolina – BMW.

Trump is clueless as to the real-life connotations of his rash decisions.

GM operates 47 U.S. manufacturing facilities and employs about 110,000 people in the United States. It buys tens of billions of dollars worth of parts from U.S. suppliers every year, and has invested over $22 billion in U.S. manufacturing operations since 2009.

“The overbroad and steep application of import tariffs on our trading partners risks isolating U.S. businesses like GM from the global market that helps to preserve and grow our strength here at home,” GM said.

In other words, the strict nationalism Trump is proposing is to our detriment.

The goal, allegedly, is to pressure Mexico and Canada to renegotiate NAFTA. It’s a dumb ploy and will not strengthen our position in the world.

GM shares were down by 2.8 percent on Friday. Their concerns were echoed by Toyota, who issued a statement saying the tariffs would “threaten U.S. manufacturing, jobs, exports, and economic prosperity.”

On July 29 and 30 there will be public hearings planned by the Commerce Department. Commerce Secretary Wilbur Ross has indicated that between that time and August he plans to wrap up the probe into whether imported cars present a national security risk.

There’s no reason to believe they do.

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Trump's trade war

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