General Motors warns U.S. auto tariffs could lead to a ‘smaller’ company

The General Motors Canada office in Oshawa, Ont. Tijana Martin/CP

General Motors Co warned on Friday that expansive U.S. tariffs on imported vehicles being considered by the Trump administration could lead to a “a smaller GM” and risks isolating U.S. businesses from the global market.

The Trump administration in May launched an investigation into whether imported vehicles posed a national security threat, and U.S. President Donald Trump has repeatedly threatened to quickly impose a 20 percent import tariff on vehicles.

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The largest U.S. automaker said in comments filed on Friday with the U.S. Commerce Department that overly broad tariffs could “lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs.”

GM said the tariffs could hike vehicle prices and reduce sales. Even if automakers opted not to pass on higher costs “this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies.”

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Toyota Motor Corp filed separate comments opposing the tariffs on Friday saying they would “threaten U.S. manufacturing, jobs, exports, and economic prosperity.”

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The company noted that Trump has repeatedly praised the automaker for investing in the United States, including a new $1.3 billion joint venture assembly plant in Alabama with Mazda.

“These investments reflect our confidence in the U.S. economy and in the power of the administration’s tax cuts,” Toyota said in its submission.

Toyota noted that international automakers assembling vehicles in the United States are based in countries including Japan, German and South Korea “that are America’s closest allies.”

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The company added it “is difficult to foresee a situation in which any of them would engage in an armed conflict with the U.S. or cut off supplies of defense materials, and if they did, the United States would have an easy recourse of simply seizing their U.S. plants.”

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On Thursday, Toyota North America chief Jim Lentz was in Washington holding meetings with lawmakers on trade issues.

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On Wednesday, two major auto trade groups warned imposing up to 25 percent tariffs on imported vehicles would cost hundreds of thousands of auto jobs, dramatically hike prices on vehicles and threaten industry spending on self-driving cars.

The Commerce Department did not immediately comment Friday. It plans two days of public hearings on July 19-20 and Commerce Secretary Wibur Ross said last week he aimed to wrap up the probe into whether imported vehicles represent a national security threat by late July or August.

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