(Reuters) – General Motors Co warned on Friday that higher tariffs on imported vehicles under consideration by the Trump administration could cost jobs and lead to a “smaller GM” while isolating US businesses from the global market.
The administration in May launched an investigation into whether imported vehicles pose a national security threat, and US President Donald Trump has repeatedly threatened to impose a 20 percent vehicle import tariff.
The largest US automaker said in comments filed with the US Commerce Department that overly broad tariffs could “lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less – not more – US jobs.”
Higher tariffs could also hike vehicle prices and reduce sales, GM said.
Its comments echoed those from two major US auto trade groups on Wednesday, when they warned that tariffs of up to 25 percent on imported vehicles would cost hundreds of thousands of auto jobs, dramatically raise prices on vehicles and threaten industry spending on self-driving cars.
Even if automakers opted not to pass on higher costs “this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies,” GM said.
GM operates 47 US manufacturing facilities and employs about 110,000 people in the United States. It buys tens of billions of dollars worth of parts from US suppliers every year, and has invested over $22 billion in US manufacturing operations since 2009.
Still, 30 percent of the vehicles GM sold on the US market in 2017 were manufactured abroad, according to the Michigan-based Center for Automotive Research. Eighty-six percent of those vehicles came from Canada and Mexico, while others came from Europe and China.
Detroit automakers Ford Motor Co and Fiat-Chrysler Automobiles NV also import many of the vehicles they sell in the United States.
“The overbroad and steep application of import tariffs on our trading partners risks isolating US businesses like GM from the global market that helps to preserve and grow our strength here at home,” GM said.
Some aides have said that Mr Trump is pursuing the national security probe to put pressure on Canada and Mexico to agree to concessions in talks to renegotiate the North American Free Trade Agreement.
GM shares closed down about 2.8 percent on Friday at $39.40.
Toyota Motor Corp filed separate comments opposing the tariffs on Friday saying they would “threaten US manufacturing, jobs, exports, and economic prosperity.”
