Trump Commerce Secretary Says U.S. Automakers Okay With Japan Trade Deal

President Donald Trump imposed tariffs on imported autos, parts, and certain raw materials earlier this year, all with the intent of negotiating new, more favorable trade deals with other countries. Thus far, the administration has reached a new trade deal with a few of those countries, including the UK, and more recently, Japan, but not Mexico and Canada, as many automakers have pushed for. A Ford-backed lobby group recently expressed disappointment in this fact, but the Trump administration says that automakers are just fine with the Japan trade deal, regardless.

According to CNBC, Commerce Secretary Howard Lutnick said that the CEOs of American automakers told him they are “cool with” the Japan trade deal, which would at least temporarily place lower tariffs of 15 percent on imported vehicles coming from China, versus 25 percent on Canada and Mexico. “Oh, my God, that’s just so silly,” Lutnick added when asked about criticism from the American Automotive Policy Council over the deal, which includes Japan accepting U.S. vehicle imports and that country making $550 billion in U.S. investments.

Lutnick also pointed out that American automakers could avoid paying tariffs if they moved production of vehicles from Canada and Mexico to the U.S. “Come on, there’s no tariff if you build it in America,” he said. “American manufacturers are going to do extremely well in America – as long as they build it in America. You build it in America, you’re good.” Other than shifting production to the U.S., Ford and its peers are taking a variety of measures to minimize the impact of these tariffs, such as stocking up on parts that comply with the current U.S.-Mexico-Canada Agreement.

However, The Blue Oval and its peers also face additional levies, including plans to impose steep new port fees on ships that transport vehicles to the U.S. Originally, the U.S. Trade Representative (USTR) proposed adding a $150 fee per vehicle on units arriving at port that aren’t built in the U.S., but backed down from that plan following backlash from the industry. Now, it’s proposing tacking on a fee of $14 per net ton starting this October, which could add around $600k to the cost of each ship coming into port, according to the Alliance for American Manufacturing.