WASHINGTON — President Donald Trump on Wednesday said the White House was studying whether it should impose import penalties on all foreign automobiles in response to GM's announcement that it was shuttering multiple U.S. plants.
The comment, made in a series of Twitter posts, was the latest attempt by Trump to revive his threat to slap tariffs on billions of dollars in auto imports from Japan, South Korea, Germany, and other countries.
Trump has said in the past that those threats were meant as a way to extract concessions from other countries on unrelated trade matters. But by connecting the threat to GM's plans, he could put extreme pressure on other world leaders as they prepare to gather at the G-20 meeting in Argentina later this week.
Such a move would mark a huge escalation of the trade war Trump has already launched against multiple other countries, forcing foreign leaders to decide quickly whether to retaliate or bend to Trump's economic demands. It could also have a profound and immediate impact on the U.S. economy, as it could drive up the cost of automobiles for a huge segment of car buyers, forcing Americans to rethink major purchases that in the past have helped the economy grow.
Trump said tariffs on cars would be effective in reviving the U.S. auto industry because the United States has had a 25 percent tariff on light truck imports since 1964, which he alleges has helped shield the U.S. market from a flood of truck imports.
This tariff is known as the "chicken tax," because it was imposed in response to a fight between U.S. and European poultry producers over the price of chickens.
"If we did that with cars coming in, many more cars would be built here," Trump wrote on Twitter. "And G.M. would not be closing their plants in Ohio, Michigan & Maryland. Get smart Congress. Also, the countries that send us cars have taken advantage of the U.S. for decades. The President has great power on this issue - Because of the G.M. event, it is being studied now!"
His point is that by driving up the cost of foreign-made automobiles, U.S. consumers would gravitate toward less costly American-made products.
But it was unclear what precisely Trump was referring to when he told Congress to "get smart" or when he said "The President has great power on this issue." Congress is not considering any measure that would penalize auto imports. In fact, a number of lawmakers have discussed curbing Trump's power to impose import penalties.
The White House can impose tariffs on auto imports if the Commerce Department concludes that the current level of imports somehow poses a national security threat to the United States. Many Democrats and Republicans in Congress have said such a finding would be preposterous, but Trump has broad leeway to use these powers if he wishes.
Foreign leaders have threatened to retaliate with tariffs against U.S. products if Trump follows through with automobile tariffs, but that hasn't deterred the White House. Trump believes that foreign countries dump low-cost items in the United States and make it difficult for U.S. manufacturers to compete, a trend that he says has destroyed millions of jobs.
His comments on Wednesday mark the third straight day that Trump has responded to GM's announcement with a series of policy-related attacks. On Monday, he ordered GM executives to reverse their decision. On Tuesday, he threatened to take away any government subsidies. And on Wednesday, he threatened the new auto tariffs. The United States imported close to $200 billion of new foreign passenger vehicles and light trucks last year, according to the U.S. Trade Representative.