General Motors has warned that higher tariffs on imported automobiles under consideration by the Trump administration could cost jobs and result in “a smaller GM” while isolating U.S. businesses from the international market.
The administration in May started an investigation into whether imported vehicles pose a national security threat, and U.S. President Donald Trump has frequently threatened to enforce a 20 percent vehicle import tariff.
The largest U.S. automaker stated in comments filed with the U.S. Commerce Department that overly broad tariffs could result in “a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less — not more — U.S. jobs.”
Higher tariffs could also hike vehicle costs and decrease sales, GM stated.
Its comments echoed those from two significant U.S. auto trade groups on Wednesday, when they cautioned that tariffs of up to 25 percent on imported vehicles would cost hundreds of thousands of auto jobs, dramatically increase costs on vehicles and threaten industry spending on self-driving cars.
Even if automakers opted not to pass on higher prices “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 stated.
GM runs 47 U.S. manufacturing facilities and has hired about 110,000 people in the United States. It buys tens of billions of dollars worth of parts from U.S. suppliers annually, and has invested more than $22 billion in U.S. manufacturing operations since 2009.
Still, 30 percent of the automobiles GM sold on the U.S. market in last year were manufactured abroad, according to the Michigan-based Center for Automotive Research. Eighty-six percent of those automobiles came from Canada and Mexico, while others were from Europe and China.