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China, Japan protest US probe into need for auto tariffs

2018-05-24 09:23

China and Japan both condemned on Thursday the Trump administration's decision to launch an investigation into whether tariffs are needed on imports of vehicles and automotive parts into the United States.

China's Commerce Ministry said Beijing would "firmly defend" its rights and interests against what it called the Trump administration's abuse of national security provisions in trade.

Pressure on global market 

Japan's minister of Economy, Trade and Industry, Hiroshige Seko, warned that additional tariffs would put the global market into turmoil.

If such a measure is taken, "it would be an extremely far-reaching trade sanction that would put the global market into turmoil. We are extremely concerned."

Seko said Japan, which accounts for about 40% of US vehicle imports, will continue to remind U.S. trade officials that any trade measures must be in line with the rules of WTO.

President Donald Trump invoked a provision authorizing the president to restrict imports and impose unlimited tariffs on national security grounds, known as Section 232 of the Trade Expansion Act of 1962.

The move comes as talks with Canada and Mexico over the North American Free Trade Agreement have stalled.

In Beijing, Commerce Ministry spokesman Gao Feng told reporters that abusing national security provisions would "undermine the multilateral trade system and disrupt the order of international trade."

"China will pay close attention to the progress of the US investigation, conduct a comprehensive assessment of the possible impact and firmly defend our legitimate rights and interests," Gao told reporters at a news conference.

Massive car industry in China 

China is a relatively minor player in the US auto import market, ranked 10th in dollar terms, but its massive car industry is eager to expand abroad.

Mexico is the top exporter of passenger vehicles and light trucks to the US followed by Japan, Canada, Germany and South Korea, according to the Department of Commerce.

However, in auto parts exports to the US, China was ranked second last year.

A person familiar with the discussions said the president has suggested seeking new tariffs of 20 to 25% on automobile imports.

Critics fear other countries will retaliate with trade sanctions of their own and question whether the move would ever be effective given the lengthy review required and legal challenges ahead.

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