The U.S. Commerce Department has submitted draft recommendations to the White House on its investigation into whether to impose tariffs of up to 25 percent on imported cars and parts on national security grounds, two administration officials said, Reuters reported.
The “Section 232” recommendations on ensuring a healthy U.S. auto industry are undergoing an interagency review process and will be discussed on Tuesday at a regularly scheduled weekly meeting of the Trump administration’s top trade officials, the officials said.
The White House has pledged not to move forward with imposing tariffs on the European Union or Japan as long as it is making constructive progress in trade talks.
The EU’s trade commissioner, Cecilia Malmstrom, is due to meet with U.S. Trade Representative Robert Lighthizer in Washington on Wednesday for more preliminary talks to launch trade negotiations.
One of the officials, who was briefed on the matter, said the administration was sending a message that it is growing frustrated with the lack of progress on auto issues but did not expect immediate action on the recommendations on Tuesday.
The substance of the recommendations, such as which vehicles or parts could be subject to tariffs, and possible tariff rates, were not immediately known.
But having the Commerce report ready for action would underscore a consistent threat from President Donald Trump - that he would impose tariffs on autos and auto parts unless the EU and Japan make trade concessions including lowering the EU’s 10 percent tariff on imported vehicles and cutting non-tariff barriers.
Last month, the administration said it would open formal trade talks with the EU and Japan in early 2019 after the 90-day required congressional notification period ends.
The Commerce Department first launched its investigation in May into whether imported autos and parts pose a national security risk. The study followed closely on the heels of the imposition of similar national security tariffs on steel and aluminum.