Trump aims at NAFTA allies with imported-vehicle tariffs

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The White House says Trump has asked Commerce Secretary Wilbur Ross to consider whether imports of cars and trucks and automotive parts threaten USA national security.

The Trump administration has already deemed imports of steel and aluminum a threat to national security, saying foreign metals are degrading the United States' manufacturing base.

Applying the tariffs under Section 232, meanwhile, would require a lengthy investigation and report from the U.S. Commerce Department.

One Canadian official, speaking on condition of anonymity, said they had heard nothing of the potential investigation before word leaked out of the White House and into the Wall Street Journal Wednesday afternoon, a few hours before the announcement.

The news comes the same day that President Donald Trump teased "big news coming soon" for American auto workers. "After many decades of losing your jobs to other countries, you have waited long enough!" The administration is now considering tariffs of up to 25%, according to those briefed on the plan.

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Almost half of the vehicles sold in the USA are imported, with many coming from assembly plants in Mexico and Canada. "But I will tell you in the end we win, we will win and we'll win big", he said.

It would also affect Honda Motor Co.

Asked if the measures would hit Mexico and Canada, a Mexican source close to the NAFTA talks said: "That probably is going to be the next battle".

He revisited the possibility again on May 11, when he floated the idea of a 20 percent tariff on imported autos during a White House meeting with senior executives of 10 major automakers, a person familiar with the meeting said.

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It was not clear, however, whether Trump's tweet was referring to a possible breakthrough in the talks.

German automakers Volkswagen AG, Daimler AG and BMW AG all have large US assembly plants. At the same time, the United States exported almost 2 million vehicles worldwide worth $US57 billion.

Peter Sklar, auto analyst with BMO Nesbitt Burns, said about 3.9 million vehicles were imported into the United States previous year from Europe and Asia. His trade chief, Robert Lighthizer, has demanded more stringent rules on auto content to ensure that more components in North American-made cars - particularly steel, aluminum and glass - are sourced from within the NAFTA zone.

Trump tweeted there will be good news coming for auto workers.

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