To exert leverage in upcoming trade negotiations, the White House must be able to back up its promises to impose penalties on what is says is unfair trade. The power to limit auto exports to the U.S. would fit that bill.
By Matthew Bey
Mexican carmarkers recently guaranteed themselves access to the United States. Now their Brazilian counterparts are looking to emulate the feat in a search for their own export markets.
As India tries to grow its economy by strengthening its automotive industry, it will continue to emphasize local production and domestic sales. But Prime Minister Narendra Modi's push to protect local jobs means India's domestic focus will limit its prospect of becoming a global auto exporter.
Its vehicle manufacturers rely on exports, and the United States is by far their most important market. But satisfying White House trade demands won't be easy for Seoul.
Facing pressure to open up its auto market to foreign competition -- as automakers in Asia, Europe and North America look for new export destinations under the threat of higher U.S. import fees -- Beijing is working to reduce overcapacity and strengthen local brands.
The South American trade bloc, known for its big import fees, has been slowly moving to open up its automotive sector.
The White House's fees on imported vehicles could push up car prices across the board and cost hundreds of thousands of U.S. jobs.
While the United States is a vital export market for Japan, its U.S. vehicle production facilities help insulate it from protectionist measures.
From its carmakers to its parts suppliers and service providers, the European Union's auto industry would feel the sting of the Trump administration's tariffs.
Through its NAFTA negotiations and tariff threats, the United States is threatening to derail long-standing automotive business ties with its northern and southern neighbors.
Earlier this year, Washington imposed tariffs on steel and aluminum, provoking retaliation. Now, the U.S. is mulling 25 percent tariffs on cars, and the stakes couldn't be higher.
