WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded U.S. Senator Josh Hawley (R-Mo.) for introducing the Protecting American Autoworkers from China Act, which raises the tariff by 100% on all vehicles imported from China, and also on vehicles assembled in other countries by firms controlled in China.
CPA has long championed the specific benefits tariffs have had on promoting domestic vehicle manufacturing, from President Johnson’s twenty-five percent on all pickup truck imports in 1963 to President Trump’s additional twenty-five percent on Chinese vehicle imports beginning in 2018. As CPA detailed, the net effect of President Trump’s additional twenty-five percent—for a total of 27.5 percent—tariff was a mix of both revenue and protection, as General Motors chose to pay the tariff while Volvo relocated its sourcing and Ford canceled offshoring plans.
“China’s predatory auto industry is a direct threat to American auto manufacturers and the hundreds of thousands of hard-working men and women that rely on this critical industry,” said Michael Stumo, CEO of CPA. “We applaud Senator Hawley for introducing legislation to increase tariffs on all Chinese vehicles, including ones assembled in other countries by CCP-controlled firms. Not only should Congress pass this bill quickly, but lawmakers should also pass legislation to revoke China’s Most Favored Nation Status. Despite granting China this status, the CCP continues its trade war on American workers and businesses, and Beijing’s Orwellian, authoritarian tactics have only continued to get worse.”
CPA believes a fully protective tariff on all Chinese vehicles, regardless of powertrain, is warranted. As CPA detailed in a submission to the United States Trade Representative, China developed its automotive industry in violation of all the specific automotive investment commitments it made when it joined the WTO. Automotive CEOs, including Tesla’s Elon Musk and Ford’s Jim Farley, agree that China’s automotive sector represents an existential threat to the established global automotive industry.
While this bill critically raises tariffs on all Chinese vehicles, regardless of where they are made, CPA continues to urge Congress and the Administration to revisit America’s negligibly-low 2.5 percent Most Favored Nation (MFN) tariff on car imports. Earlier this year, the United Auto Workers called for raising the MFN tariff as a necessary step to secure the North American automotive supply chain.
CPA strongly supports revoking China’s MFN status. A recent economic analysis by CPA found that revoking China’s Most Favored Nation (MFN) status would result in the creation of 2 million new American jobs, increase real household incomes by $3,647, and increase real gross domestic product (GDP) by 1.75%.
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