The Trump administration is seeking to impose new tariffs on vehicle and auto-parts imports of as much as 25%, according to a surprise announcement late Wednesday from the Commerce Department.
The president has asked for, and U.S. Department of Commerce will conduct, an investigation into the auto import tariffs based on national security concerns, according to published reports.
A story in the online edition of the Wall Street Journal Wednesday night, citing people in the Commerce Department familiar with the request, said the president has asked his team to investigate using a section of the Trade Expansion Act to determine if tariffs or other restrictions are needed. The Journal noted this is the same legal justification the administration used to impose tariffs on steel and aluminum imports in March.
President Trump has said before he intends to impose automobile import tariffs, and tweeted Wednesday that there would be 'big news" coming soon.
There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!— Donald J. Trump (@realDonaldTrump) May 23, 2018
Stocks in Asia were trading lower early Thursday. The Nikkei 225 benchmark was down 1.29%, Hong Kong's Hang Seng fell 0.10% and in Shanghai, stocks were down 0.11%.
News about the possible tariffs came as China starts to make good on its pledge to reduce tariffs on car imports -- and Tesla Inc.'s TSLA sales in the People's Republic stand to win big from the news.
China's Ministry of Finance announced that import tariffs for most vehicles will be slashed from 25% to 15%. The tariff cuts become official on July 1.
That huge import tariff cut gives Tesla the ability to compete with Chinese electric car manufacturers, who have benefited from the ability to sell their cars at lower prices in the domestic market. Tesla has already announced that it will lower its prices because of the change, cutting the selling prices of Model X and Model S vehicles by more than 6%.
Read more in China Makes Good on Car Tariff Pledge, Tesla Wins Big.