Republicans in Congress slam Trump probe of auto imports

[May 25, 2018]  By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) - Some of President Donald Trump's fellow Republicans in the U.S. Congress said on Thursday that his administration's national security investigation of car and truck imports amid a trade spat with China is being pursued under false pretenses and could hurt U.S. consumers.

Trump said on Wednesday that ongoing U.S.-China trade talks would need "a different structure" because they appeared "too hard to get done."

Shortly after, the Commerce Department launched a probe of auto imports under Section 232 of the Trade Expansion Act of 1962 that could lead to new U.S. tariffs similar to those imposed on imported steel and aluminum in March.

Higher tariffs could be particularly painful for Asian automakers, including Toyota Motor Corp <7203.T>, Nissan Motor Co <7201.T>, Honda Motor Co <7267.T> and Hyundai Motor Co <005380.KS>, which count the United States as a key market.

Congressional Republicans said it was unclear what Trump was aiming to accomplish with the probe, warning it could result in U.S. job losses, and with some suggesting it was a political tactic ahead of midterm elections in November.

Senate Foreign Relations Committee Chairman Bob Corker said there was "no reason" to conduct a national security investigation of auto imports.

"This appears to be either an attempt to affect domestic politics ahead of the election or for some other transactional purpose regarding ongoing trade discussions. This is a dangerous course and should be abandoned immediately," Corker said in a statement.

Corker is a Republican from Tennessee, where Volkswagen, Nissan and other auto-related manufacturers have assembly and production plants.

Pennsylvania's Republican Senator Pat Toomey said on Twitter that Trump was making the move "under the false pretense of national security" and that it "invites retaliation."

In the House of Representatives, Kentucky Republican Andy Barr, who has a Toyota factory in his district, said he wants to know what Trump seeks to accomplish.

Automobiles are on a truck for delivery to a car lot in Queens, New York, U.S., May 24, 2018. REUTERS/Shannon Stapleton

"Toyota Kentucky is as much of an American manufacturing company as Ford in Louisville," Barr told Reuters. "It's an American subsidiary of a Japanese parent, but it is an American company. There needs to be a level playing field."

Republican Representative Roger Williams, who owns a Chrysler-Dodge-Jeep auto dealership in Weatherford, Texas, said any tariff on auto imports would negate the positive impact of the new Republican tax law on consumers, and increase costs for U.S. car manufacturers that buy foreign parts.

"They're world vehicles. Parts are made everywhere and they're put together somewhere," Williams told Reuters.

Senator Orrin Hatch, the finance committee chairman who shepherded the tax law through that chamber, called the Trump investigation of auto imports "deeply misguided."

"For most Americans, cars are the second largest purchase they make, after their homes. Taxing cars, trucks and auto parts coming into the country would directly hit American families," Republican Hatch said in a statement, urging Trump to "remain focused on addressing China's trade practices."

It was not yet clear whether lawmakers might try to act if the administration eventually imposes new tariffs on foreign auto imports.

(Reporting By Richard Cowan and Susan Cornwell; additional reporting and writing by Amanda Becker; Editing by Bill Berkrot)

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