President Donald Trump on Friday issued a proclamation directing U.S. Trade Representative Robert Lighthizer to enter negotiations with trading partners, including the EU and Japan, to address the threatened impairment of national security posed by automotive imports, according to the proclamation.
The proclamation requires the USTR to update the president on the outcome of negotiations before Nov. 14.
The U.S. entered trade agreement negotiations with Japan on April 15. On the same day, by coincidence, the European Council approved a negotiating mandate for trade agreement talks with the U.S.
The Trump administration was facing a deadline of Saturday for acting upon any recommendations for adjusting imports of automotive imports to the U.S. included in the Commerce Department’s Section 232 report submitted to the White House in February.
The proclamation specifically directs USTR to pursue negotiations regarding U.S. automotive imports with the EU, Japan and “any other country the trade representative deems appropriate.”
Trump stated in the proclamation that he also has considered the renegotiated Korea-U.S. Free Trade Agreement (KORUS) and said the U.S.-Mexico-Canada Agreement (USMCA) “could help to address the threatened impairment of national security” found in Commerce’s report when the pact is implemented.
Broadly speaking, USMCA would raise the amount of regional value content required to qualify for free trade agreement benefits from 62.5% to 75% and includes several other new rules of origin for automobiles and automotive parts traded in North America.
KORUS modifications included doubling the number of U.S. car exports exempted from South Korean safety standards — as long as the vehicles meet U.S. safety standards — from 25,000 to 50,000 units per year.
Responses to the proclamation by the U.S. Chamber of Commerce and Senate Finance Committee Chairman Chuck Grassley, R-Iowa, did not embrace the notion that automotive imports could present a national security threat.
“The importation of passenger cars and auto parts is not a threat to national security,” Neil Bradley, chief policy officer for the chamber, said in a statement. “This is a misuse of the administration’s trade authorities. The continued threat of tariffs on cars and auto parts only creates more uncertainty weakening our economy.”
In a statement, Grassley said he’s glad Trump decided to delay automotive tariffs and that he has “serious questions” about the use of national security as a basis to impose tariffs on cars and car parts.
“I’ll continue to strongly support the Trump administration’s pursuit of trade negotiations with the European Union and Japan,” Grassley said. “I encourage Ambassador Lighthizer to pursue comprehensive trade agreements that benefit all Americans, including farmers, manufacturers and service providers.”
Sens. Rob Portman, R-Ohio, and Pat Toomey, R-Pa., recently introduced separate pieces of legislation to rein in presidential Section 232 authorities.
Portman’s legislation, the Trade Security Act, would provide for Congress to pass a disapproval resolution to nullify Section 232 remedies after they are ordered.
Contrastingly, Toomey’s legislation, the Bicameral Congressional Trade Authority Act, introduced in January, would give Congress 60 days to pass an approval resolution for tariffs or else proposed actions wouldn’t take effect.