U.S. Wheat Associates: The Only Threat from Auto Imports is Retaliation from Trading Partners
In response to a U.S. Department of Commerce Section 232 investigation into automobile and auto parts imports, U.S. Wheat Associates (USW) once again expressed concern about using questionable national security arguments as a basis for import restrictions and the potential for retaliation from trading partners.
In comments on the investigation submitted June 22, 2018, USW strongly encouraged the Commerce Department to “stick to serious national security concerns when using Section 232 and avoid making this process even more ridiculous than it has become after the steel and aluminum investigations.”
Before any restrictions on automobile and auto parts imports are taken under Section 232, USW said Commerce “should consider the fallout if other countries follow suit and impose restrictions on U.S. wheat or other products as a result of their own national security concerns, whether real or imagined.”
As a representative of U.S. wheat farm families who rely on export demand to boost their income potential, USW was among the first agricultural organizations to publicly oppose the use of Section 232 to impose tariffs on steel and aluminum imports. Farmers have already been hit hard by tariffs on hundreds of food and agricultural products in retaliation for recent unilateral trade actions and much more is expected soon.
While the reactions of countries to U.S. steel and aluminum protectionism has been negative for farmers, USW said the case of automobiles is much more dangerous because the dollar figures are so much larger.
“Automotive imports in 2017 were about ten times larger than steel imports and much of this came from significant wheat importers like Mexico, Japan, South Korea and the European Union,” USW said in its comments. “The chances that U.S. wheat farmers will face retaliation increases substantially if the final measures reflect the scope of the investigation.”
USW also argues that invalid use of the national security exemption created in Section 232 of the General Agreement on Tariffs and Trade undermines effective global trading rules.
“Whatever surface level plausibility existed for justifying restriction on steel and aluminum imports is entirely absent when it comes to automobiles,” USW stated. “The breathtaking leap of logic required to recommend tariffs on imported automobiles and parts due to their threats to national security suggest that the only plausible reasons for this action are either economic protectionism in violation of our WTO commitments or a negotiating tactic. Use of this statute as a negotiating tactic is an abuse of the authority granted by Congress and economic protection is available through trade remedy laws if the need for protection meets the requirements of the relevant statutes. In either case, the Department of Commerce should find that these imports do not threaten national security.”