Pub. 4 Issue 4

14 BY WES LUTZ Auto Tariffs Are the Wrong Way to Address Trade Concerns W hen the NADA Board of Directors met earlier this month in New York, develop- ments in Washington, D.C., once again dominated the conversation among direc- tors from all over the country. No surprise there. But what was surprising was the specific area of policy currently under consideration in Washington. I’m referring, of course, to the possibility of tariffs of as much as 25% on poten- tially all imported vehicles and automotive parts. Our directors had a number of questions before we even got to specific concerns. How did we get here so quickly? How did we go from tariffs on imported steel and aluminum from certain countries to a potential across-the-board tariff on imported ve- hicles? How will the process of the Department of Commerce’s “national security” investigation unfold? Perhaps most importantly, how can a president who’s done so much good for our industry and the nation’s economy – through a historic tax cut and tax policies allowing dealerships to invest more in their businesses and their employees – now be propos- ing something that could raise new vehicle prices by thousands of dollars? My view is that you have to look beyond the tariffs themselves in order to understand what is unfolding inWashington. And in that respect, I believe President Trump is rightly concerned with three things. The first is the loss of manufacturing jobs in the U.S. over the past 40 years. The second is the U.S. trade deficit, which was a staggering $568 billion in 2017. And the third is an unlevel playing field when it comes to international trade that puts the U.S. at a significant disadvantage in many areas, even with our strongest trading partners. The president wants to negotiate better trade deals for the U.S., American workers and American consumers. He’s right to be concerned about the trade deficit. But the tactic of new and steep tariffs on auto and auto parts imports, if implemented broadly, would hurt the auto industry and our customers and have severe unintended consequences.