Trump has said in the past that those threats were meant as a way to extract concessions from other countries on unrelated trade matters. But by connecting the threat to GM’s plans, he could put extreme pressure on other world leaders as they prepare to gather at the Group of 20 meeting this week in Argentina.
Such a move would mark a huge escalation of the trade war Trump has already launched against multiple countries, forcing foreign leaders to decide quickly whether to retaliate or bend to Trump’s economic demands. It could also have a profound and immediate effect on the U.S. economy, as it could drive up the cost of automobiles for a significant segment of car buyers, forcing Americans to rethink major purchases that in the past have helped the economy grow.
Trump said tariffs on cars would be effective in reviving the U.S. auto industry because the United States has had a 25 percent tariff on light-truck imports since 1964, which he says has helped shield the U.S. market from a flood of truck imports.
This tariff is known as the “chicken tax,” because it was imposed in response to a fight between U.S. and European poultry producers over the price of chickens.
“If we did that with cars coming in, many more cars would be built here,” Trump wrote on Twitter. “And G.M. would not be closing their plants in Ohio, Michigan & Maryland. Get smart Congress. Also, the countries that send us cars have taken advantage of the U.S. for decades. The President has great power on this issue — Because of the G.M. event, it is being studied now!”
His point is that by driving up the cost of foreign-made automobiles, U.S. consumers would gravitate toward less costly American-made products.
However, it was unclear precisely what Trump was referring to when he told Congress to “get smart” or when he said, “The President has great power on this issue.” Congress is not considering any measure that would penalize auto imports, and a number of lawmakers have discussed curbing Trump’s power to impose import penalties.
The White House can impose tariffs on auto imports if the Commerce Department concludes that the current level of imports somehow poses a national security threat to the United States. Many Democrats and Republicans in Congress have said such a finding would be preposterous, but Trump has broad leeway to use these powers.
Foreign leaders have threatened to retaliate with tariffs against U.S. products if Trump follows through with automobile tariffs, but that has not deterred the White House. Trump has said that foreign countries dump low-cost items in the United States and make it difficult for U.S. manufacturers to compete, a trend he says has destroyed millions of jobs.
His comments Wednesday mark the third straight day he has responded to GM’s announcement with policy-related attacks. On Monday, he ordered GM executives to reverse their decision. On Tuesday, he threatened to take away government subsidies, and on Wednesday threatened new auto tariffs. The United States imported close to $200 billion of new foreign passenger vehicles and light trucks last year, according to the Office of the U.S. Trade Representative.
Multiple top Trump officials responded angrily to GM’s decision.
The Twitter account of Treasury Secretary Steven Mnuchin amplified a message from an anonymous account called @The_Trump_Train on Wednesday that demanded GM “pay back the $11.2 billion bailout that was funded by the American taxpayer.”
Mnuchin later deleted his endorsement of that statement and would not provide more information into what happened or who was involved.
“A retweet was posted last night on @stevenmnuchin1 by someone other than the Secretary or an individual with authorized access to his account. As such, the retweet is being deleted,” Mnuchin wrote in a Twitter post from the same account that originally retweeted @The_Trump_Train.
Much of the information in the original Twitter post was incorrect. GM did receive government bailout funds after the financial crisis, but it repaid its U.S. loans — worth $6.7 billion — in 2010. The Treasury Department managed the government loan program, and Mnuchin has prided himself on an acute knowledge of all the agency’s operations.
There are many anonymous Twitter accounts that post inaccurate information in support of Trump, but @The_Trump_Train had an impact Wednesday at the White House, too: Four of its other posts were retweeted by Trump the same day.
Those posts, unlike the one originally endorsed by Mnuchin’s account, have not been deleted.