Trump administration explores tariffs on autos, auto parts

Media playback is unsupported on your device                  Media caption Can tariffs really save an industry

Media playback is unsupported on your device Media caption Can tariffs really save an industry

Trump "secretly watching CNN" all day and night GOP candidate behind "Deportation Bus" loses in gubernatorial bid Penn to Hewitt: Mueller probe born out of "hysteria" MORE on Wednesday asked the Commerce Department to investigate whether he can levy upward of 25 percent tariffs on imported automobiles under Section 232 of trade law, according to the White House.

The president signaled earlier Wednesday on Twitter that an important announcement was imminent to help the USA car-manufacturing industry.

Earlier, Trump tweeted "big news coming soon for our great American Autoworkers". Trump said in the tweet.

The United States imported 8.3 million vehicles in 2017 worth $US192 billion, including 2.4 million from Mexico, 1.8 million from Canada, 1.7 million from Japan, 930,000 from South Korea and 500,000 from Germany, according to U.S. government statistics.

Another administration official said the move was aimed partly at pressuring Canada and Mexico to make concessions in talks to update the North American Free Trade Agreement that have languished in part over auto provisions, as well as pressuring Japan and the European Union, which also export large numbers of vehicles to the United States.

Commerce Secretary Wilbur Ross announced he initiated a so-called Section 232 investigation on auto trade - which would provide the legal basis to impose tariffs, if his department finds imports threaten U.S. national security - after speaking with Donald Trump on the matter. It is the same method Trump usedearlier this year to slap a 25% tariff on imported steel and a 10% tariff on imported aluminum.

During the past 20 years, imports of passenger vehicles have grown from 32 per cent of cars sold in the United States to 48 per cent.

Critics fear that other countries will retaliate or use national security as a pretext to impose trade sanctions of their own.

Trump said both Mexico and Canada have been "very hard to deal with" and he's "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.

He tells reporters on the South Lawn at the White House that "you'll be seeing very soon what I'm talking about".

"I am not happy with their requests".

But he says, "we will win and will win big". The U.S. has also sought to change NAFTA's dispute-resolution system, and include a sunset clause that would allow countries to exit after five years.

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