Tennessee’s massive automotive industry is at the center of a Washington drama playing out over the nation’s $200 billion worth of auto-related imports.
Sen. Lamar Alexander unveiled a bipartisan bill Wednesday in his effort to fend off a proposed federal tax known as a tariff on imports of vehicles and auto parts.
Sen. Bob Corker earlier signed on to a separate proposal meant to push back against tariffs the White House says can lift the nation’s manufacturing industry.
Both of the Tennessee Republicans have sided with automotive executives who contend President Donald Trump’s plan to curtail imports as a national security measure would trigger manufacturing layoffs.
Trump has proposed a 25 percent tax on vehicles and auto parts entering the United States.
Alexander and Sen. Doug Jones, D-Alabama, together introduced the Automotive Jobs Act of 2018. It would require a comprehensive study of the U.S. auto industry's vitality before tariffs were applied.
Trump did not immediately respond to the action.
In Washington, the U.S. Chamber of Commerce and an array of industry leaders have urged Trump to back off on tariffs. The Chamber contends Trump could spark a trade war.
But some manufacturing analysts say the president’s efforts haven’t derailed the nation’s industrial base.
Alan Tonelson, an independent Washington economist who formerly worked with the U.S. Business & Industry Council, a trade group for small manufacturers, said the earlier round of tariffs on imported steel and aluminum has not yet damaged the American industry.
“There’s no statistical evidence to date that the metals tariffs, many of which have been in effect since late March, have harmed upstream industries, and plenty of statistical evidence that these metals consumers have been faring just fine,” Tonelson wrote last week.
Rather than resort to U.S. tariffs, Tonelson called for a reworking of the NAFTA trade accord with Canada and Mexico to impose strong tariffs on imports on a wide range of manufactured goods into North America.
Alexander’s measure with Jones would act like a kind of timeout in the tariff disputes. Alexander described the bill as a way to give the president a second opinion on tariffs.
The proposal would require the U.S. International Trade Commission study the impact of the tariffs on the nation’s automotive industry and provide the results to the White House.
The measure Corker backed would require congressional approval of the designated tariffs.
Both senators aim to preserve an automotive sector that employs more than 50,000 workers on vehicle assembly lines and in auto-parts plants and provides $12 billion in annual Tennessee tax revenue.
After the White House outlined the auto tariff proposal earlier this summer, manufacturing trade groups insisted the tariffs would thwart the U.S. economy.
The Center for Automotive Research, a think tank located near Detroit, figures only 52 percent of the cars sold nationwide last year were assembled in the United States. Most of those autos contained some imported parts.
The Peterson Institute for International Economics, a think tank at Washington, estimates the 25 percent tariff on imported cars, trucks and auto parts would raise sticker prices at least $1,400 for the least expensive models and up to $7,000 for high-end imports.
Peterson economists predict the network of tariffs imposed already and proposed by Trump could cost 600,000 U.S. jobs.