Trump Initiates Trade Inquiry That Could Lead to Tariffs on Foreign Cars

Trump met with top auto executives early last year in Michigan

The Trump administration is considering slapping tariffs on automobiles imported into the USA, a person familiar with the deliberations said, a move that may be created to pressure Mexico and Canada to wrap up negotiations quickly over a new Nafta agreement.

It was not clear, however, whether Trump's tweet was referring to a possible breakthrough in the talks.

Trump had signaled the move on Twitter earlier on Wednesday, writing: "There will be big news coming soon for our great American autoworkers".

Almost half of the vehicles sold in the US are imported, with many coming from assembly plants in Mexico and Canada.

The latest announcement comes as negotiations with Canada and Mexico over revamping the continent-wide North American Free Trade Agreement (NAFTA) have stalled over auto demands.

The Trump administration used that authority in March to slap tariffs of 25 percent on imported steel and 10 percent on aluminum imports.

At a meeting with automakers at the White House on May 11, Trump told automakers he was planning to impose tariffs of 20 or 25 per cent on some imported vehicles, sources have told Reuters, specifically criticising German automakers for importing a large number of vehicles into the US. The provision authorizes the president to restrict imports and impose unlimited tariffs on national security grounds.

Turkey's measures are in line with the losses caused by hurdles to Turkey's iron and steel exports to the US.

Trump offered a hint about the move earlier in the day on the South Lawn, telling reporters that "you'll be seeing very soon what I'm talking about".

Trade experts have warned that the use of Section 232 opensthe door to possible retaliation from other countries and violates worldwide trade rules.

Automakers think Trump might target the European Union and potentially Canada, Mexico and Japan.

"I am not happy with their requests".

Daniel Ujczo, a trade lawyer with Dickinson Wright PLLC, said the tariff threat is likely meant to pressure Mexico into accepting US demands for NAFTA changes that would shift more auto production to the USA from Mexico.

In another missive referring to trade talks with China, he said that, while the discussions were proceeding nicely, "in the end we will probably have to use a different structure".

Presiden implies deal on NAFTA is near, but others dispute the notion.

The U.S.is in talks with China on a deal to avoid tit-for-tat tariffs between the world's two biggest economies.

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