GM Warns Tariffs Could Force U.S. Job Cuts

(RTTNews) - General Motors Co. (GM) warned the Trump administration that tariffs on vehicle imports would hurt its competitiveness, cost U.S. jobs and result in "a smaller GM."

In comments submitted to the U.S. Commerce Department on Friday, General Motors said tariffs the administration has proposed for auto imports would raise its costs and eventually lead to higher prices for consumers. In turn, that likely would dent car demand, which could lead to job losses at auto makers and parts suppliers, GM said.

Other major auto makers joined GM in comments to the department, including Toyota Motor Co. (TM), which warned that auto tariffs "would have a negative impact on all manufacturers," increasing the cost not only of imported vehicles, but also U.S.-built cars that use foreign-sourced parts.

The White House in May asked the Commerce Department to investigate whether tariffs of up to 25% on imported vehicles could be used on national- security grounds, citing a 1962 law that allows for emergency trade sanctions in the event of a threat. The administration used the same justification to impose tariffs on steel and aluminum imports this spring.

President Donald Trump repeatedly has pressed both U.S. and foreign auto makers to build more vehicles in America, which would create jobs in Rust Belt states that helped elect him. He also has complained of an uneven playing field. The EU has a 10% tariff on vehicles imported from the U.S. China imposes a 25% duty on U.S. cars.

"The economic fortitude of companies like ours directly supports the economic strength of the nation" and the "security posture of the United States," GM said. "We want to explain how tariffs on auto imports may jeopardize them both."

The company said broad U.S. trade barriers on vehicles and auto parts would raise the company's costs and hurt its competitiveness against foreign auto makers, especially against manufacturers in lower-wage countries. It also warned that retaliatory moves by governments in other key markets would hurt its overseas business.