About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (June 17, 2019)

handle is hein.crs/govbadu0001 and id is 1 raw text is: Conresioa Reeac Seric Updated June 17, 2019 Section 232 Auto Investigation Background On May 17, 2019, President Trump announced his Administration's determination that U.S. imports of automobiles and certain automotive parts threaten to impair U.S. national security. Under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862, as amended), this determination gives the President broad authority to respond to the threat, including potentially imposing unilateral import restrictions. The President is seeking a negotiated solution, instructing the U.S. Trade Representative (USTR) to reach agreements with Japan and the European Union (EU) to address the threat. The USTR is to report on its progress within 180 days. The Trump Administration initiated its investigation on auto imports on May 23, 2018 (83 FR 24735). The Department of Commerce (Commerce), which has statutory responsibility for such investigations, submitted its report to the President on February 17, 2019, but it has not been made public. According to the President, it concluded that U.S. auto imports pose a national security threat because they affect American-owned producers' global competitiveness and research and development on which U.S. military superiority depends. The President's emphasis on U.S. ownership implies the Administration sees foreign- owned automakers operating in the United States as having fewer benefits to U.S. national security. Toyota and other Japanese-owned auto firms objected to this view, noting significant U.S. investments. According to data from the Bureau of Economic Analysis, Japanese firms have invested over $50 billion dollars in the U.S. auto sector, directly employing 170,000 workers. The Section 232 investigation is a component of a broader Administration agenda related to U.S. trade and the auto industry, including: (1) expanding domestic auto manufacturing; (2) addressing bilateral trade deficits; and (3) reducing disparities in U.S. and trading partner tariff rates. At 2.5%, U.S. passenger auto tariffs are lower than some trading partners, including the EU, with auto tariffs of 10%. U.S. tariffs on light trucks, including pick-ups and sport utility vehicles, are much higher at 25%. Commerce received more than 2,000 comments on the Section 232 investigation and held a public hearing in July 2018. Labor union groups generally supported the investigation. The U.S. motor vehicle industry has voiced strong opposition to potential tariffs and had a united position at the Commerce hearing. Several Members have voiced concern about the investigation and potential tariffs. The U.S. Automotive Industry Integrated Global Supply Chain Over the past 25 years, the global auto industry has almost doubled in size, driven by China's growth as a major auto producing and consuming nation, making and selling nearly 28 million vehicles in 2018. General Motors now sells more vehicles in China than in the United States. China's rise in vehicle and parts manufacturing has added a new, often inexpensive, source of parts that may compete with manufacturers in other countries. In 2018, more than 35 countries sold nearly $160 billion in auto parts in the United States. Since the North American Free Trade Agreement (NAFTA) went into force, U.S. production growth has been relatively steady, except during recessions, rising from 9.7 million vehicles in 1992 to 11.3 million in 2018. At the same time, production in South Korea and Mexico also increased, while decreasing in two other major auto-producing countries, Japan and Germany. Major distinguishing factors in the U.S. market during this time include: * an increase in the number of foreign-owned auto manufacturing plants in the United States from seven in 1992 to 17 in 2018; * the growth of Mexico as a source of vehicles for U.S. sales from 1 million per year when the NAFTA entered into force in 1994 to 4 million in 2017; * the doubling of U.S. vehicle exports in recent years to more than 2 million units in 2017; and, * a change in the U.S. fleet composition with a growing U.S. consumer preference for light trucks over passenger cars: 65% of U.S. sales were light trucks in 2017, compared to 50% in 2012. (Some automakers are now discontinuing production of passenger cars.) Figure I. Origin of Vehicles sold in U.S. % of total U.S. light vehicle sales (passenger cars and light trucks) U.S.-made Imported 2010 5 41 2018 52 48% Source: CRS analysis based on Ward's Automotive Database, and U.S. International Trade Administration import data. U.S. vehicle sales are increasingly composed of imports (Figure 1), although more than half of imported vehicles were manufactured in Canada or Mexico with significant U.S. content, including engines, transmissions, and other components. Some assemblies, such as steering and braking systems, cross the border up to six times as plants in the NAFTA region add components. More than half of U.S. imports from Canada and Mexico are produced by General Motors, Ford, and Fiat-Chrysler. Motor Vehicle Industry Employment and R&D Motor vehicle assembly and parts manufacturing generate significant employment opportunities in almost every U.S. https://crsreports.congressge

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most