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GM Warns Trump tariffs could shrink the automaker in the US



General Motors Co. warned the Trump administration strongly that it could shrink US operations and cut jobs if tariffs apply to imported vehicles and car parts.

"Increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and less risk – no more – US jobs," said the country's largest automaker in comments submitted to the Ministry of Commerce on Friday.

Read more: Who is the enemy in Trump's Trade War?

President Donald Trump ordered an investigation into whether or not car imports represented national security risks last month, in a section of the same 60th Commercial Code used to impose levies on steel and aluminum. The government should consider car fares of up to 25 percent.

Read GM's comments here

Bloomberg's David Welch reports on GM's testimony that US jobs could be reduced due to car import duties] (Source: Bloomberg)

The probe has come from manufacturers Suppliers and auto dealers made alarm because all major automakers – including GM and Ford Motor Co. – import a significant portion of the vehicles they sell to the US from other countries. Parts taxes would also have big implications for top models like the Ford F-150 pickup and the Toyota Camry sedan, boosting prices by thousands of dollars.

Read More: Toyota Camry sees cost increase of $ 1,800 [19659002] GM fell 1.9 percent to $ 39.74, its low of the day, at 2:24 am in New York after the release of the comments. The stock is heading for its third weekly decline, the longest since March.

The White House did not comment on GM's comments immediately.

Where GM gets its cars

About 40% of US sales this year will be imported vehicles

Source: LMC Automotive


Additional tariffs – in addition to those recently applied to steel, aluminum and Chinese products – GM and ultimately its customers, the Detroit-based manufacturer of Chevrolet, could have hurt, Cadillac, Buick and GMC vehicles said. Higher prices would reduce sales, especially for less affluent consumers, and reduce the number of factory workers needed.

If GM were to try to absorb the additional costs, it would have less money in popular vehicles getting jobs in production or towards key technologies including electric and self-driving cars.

"The threat of steep tariffs on vehicle and auto parts imports risks GM's competition against foreign auto producers by building broad brush trade barriers that increase our global costs, a key competitive instrument with manufacturers in low-wage countries and promoting a trading environment in which we could be reciprocated in other markets, "the company said.

GM pickup Chevrolet Silverado was the best-selling model that was last imported from Mexico year, while the Chevrolet Equinox crossover was the leading vehicle sourced from Canada, according to LMC Automotive.

"GM Imports This is a huge issue," said Alan Baum, autoanalyst in West Bloomfield, Michigan, by telephone. "And for parts, it's not just GM, everyone imports a lot of electronics from Asia, which are quality parts."

( Updates with background information on industrial alarm in the fourth paragraph. )


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