In a White House Proclamation published today, Trump declared automobile imports and certain parts “threaten to impair the national security of the United States”. And, the countries’ defense and military superiority “depend on the competitiveness of our automobile industry and the research and development that industry generates.”
Thus, Trump directed US Trade Representative Robert Lighthizer to start negotiation process. And, if agreements cannot be reached within 180 days, Trump will determine whether and what further actions to take.
In a more detailed release, it’s noted that American-owned automotive R&D and manufacturing are vital to national security. But with increased competitions from imports, American-owned producers’ share of the domestic automobile market has “contracted sharply”, declining from 67% in 1985 to 22% in 2017.
Meanwhile, “protected foreign markets, like EU and Japan, “impose significant barriers to automotive imports from the United States, severely disadvantaging American-owned producers and preventing them from developing alternative sources of revenue for R&D in the face of declining domestic sales. ” American-owned producers’ share of the global automobile market fell from 36% in 1995 to just 12% in 2017
And, “defense purchases alone are not sufficient to support . . . R&D in key automotive technologies.” Sales revenue enables R&D expenditures that are necessary for long-term automotive technological superiority, and automotive technological superiority is essential for the national defense.
Thus, “domestic conditions of competition must be improved by reducing imports. American-owned producers must be able to increase R&D expenditures to ensure technological leadership that can meet national defense requirements.”