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From the Associated Press
WASHINGTON (AP) — The Trump administration on Wednesday launched an investigation into whether tariffs are needed on the imports of automobiles into the United States, moving swiftly as talks over the North American Free Trade Agreement have stalled. President Donald Trump predicted earlier that U.S. automakers and auto workers would be “very happy” with the outcome of the NAFTA talks.
The White House said in a statement that the president had asked Commerce Secretary Wilbur Ross to consider whether the imports of automobiles, including trucks, and automotive parts threaten U.S. national security. The president said in the statement that “core industries such as automobiles and automotive parts are critical to our strength as a Nation.”
The U.S. remains far apart on the talks over rewriting the trade pact with Canada and Mexico, with the discussions at an impasse over rules for car production. The initiation of the trade investigation could be seen as an attempt to gain leverage in the talks with the two U.S. neighbors. Treasury Secretary Steven Mnuchin has said that efforts to renegotiate the trade agreement could spill into next year.
Nearly half of the vehicles sold in the U.S. are imported, with many coming from assembly plants in Mexico and Canada.
COMMENT:-
During the last complete year for which figures are available, approximately 11% (based on dollar value) of all US new car and light trucks were manufactured in Canada and approximately 10.5% were manufactured in Mexico. For some reason the prospect of American car companies shutting up shop in Canada and moving to the US reminds me of the Venezuelan oil industry's nationalization.
When Venezuela nationalized its oil industry, it did so by offering to pay the oil companies for their facilities and leases. The oil companies protested vigourously - claiming that their facilities and leases were worth MUCH MUCH more than the Venezuelan government was paying for them. The Venezuelan government decided to be reasonable and, after announcing that they had based their price on what the oil companies had stated that their facilities and leases were worth when they filed their annual tax returns, said that they were more than happy to pay what the oil companies wanted - based on what the oil companies said their facilities and leases were actually worth. Of course, since that wasn't the figure that the oil companies had used when filing their annual tax returns, it would only be proper to go back and calculate how much the oil companies SHOULD have paid in taxes based on what the oil companies said their facilities and leases were actually worth and then deduct the underpayment (plus interest, penalties, interest on penalties, and costs) from the amount that the oil companies would receive for their facilities and leases.
HOWEVER, all that would take time and cost both the Venezuelan government and the oil companies a whole lot of money, so the Venezuelan government offered the oil companies two options:
Trump launches probe into auto imports, possible tariffs
WASHINGTON (AP) — The Trump administration on Wednesday launched an investigation into whether tariffs are needed on the imports of automobiles into the United States, moving swiftly as talks over the North American Free Trade Agreement have stalled. President Donald Trump predicted earlier that U.S. automakers and auto workers would be “very happy” with the outcome of the NAFTA talks.
The White House said in a statement that the president had asked Commerce Secretary Wilbur Ross to consider whether the imports of automobiles, including trucks, and automotive parts threaten U.S. national security. The president said in the statement that “core industries such as automobiles and automotive parts are critical to our strength as a Nation.”
The U.S. remains far apart on the talks over rewriting the trade pact with Canada and Mexico, with the discussions at an impasse over rules for car production. The initiation of the trade investigation could be seen as an attempt to gain leverage in the talks with the two U.S. neighbors. Treasury Secretary Steven Mnuchin has said that efforts to renegotiate the trade agreement could spill into next year.
Nearly half of the vehicles sold in the U.S. are imported, with many coming from assembly plants in Mexico and Canada.
COMMENT:-
During the last complete year for which figures are available, approximately 11% (based on dollar value) of all US new car and light trucks were manufactured in Canada and approximately 10.5% were manufactured in Mexico. For some reason the prospect of American car companies shutting up shop in Canada and moving to the US reminds me of the Venezuelan oil industry's nationalization.
When Venezuela nationalized its oil industry, it did so by offering to pay the oil companies for their facilities and leases. The oil companies protested vigourously - claiming that their facilities and leases were worth MUCH MUCH more than the Venezuelan government was paying for them. The Venezuelan government decided to be reasonable and, after announcing that they had based their price on what the oil companies had stated that their facilities and leases were worth when they filed their annual tax returns, said that they were more than happy to pay what the oil companies wanted - based on what the oil companies said their facilities and leases were actually worth. Of course, since that wasn't the figure that the oil companies had used when filing their annual tax returns, it would only be proper to go back and calculate how much the oil companies SHOULD have paid in taxes based on what the oil companies said their facilities and leases were actually worth and then deduct the underpayment (plus interest, penalties, interest on penalties, and costs) from the amount that the oil companies would receive for their facilities and leases.
HOWEVER, all that would take time and cost both the Venezuelan government and the oil companies a whole lot of money, so the Venezuelan government offered the oil companies two options:
- take what they had been originally offered and shut up; or
- take the net remaining (if any) once their taxes had been reassessed right back to the time that they first started operating in Venezuela and shut up (the Venezuelan government indicated that they would be willing to waive any negative value and not require the oil companies to come up with the difference if it turned out that the oil companies owed more in back taxes (plus interest, penalties, interest on penalties, and costs) than their facilities and leases were worth.