Trump aides such as U.S. Trade Representative Robert Lighthizer (left) have raised concerns about the proposed tariffs. One exception is trade adviser Peter Navarro (right), an unapologetic protectionist. | Chip Somodevilla/Getty Images White House Trump administration withholds report justifying 'shock' auto tariffs The Commerce Department's February finding that major tariffs on foreign cars can be justified on national security grounds has not previously been confirmed.

A confidential government report has provided President Donald Trump with a legal rationale to impose heavy new tariffs on foreign cars as soon as this spring, a prospect fiercely opposed by White House officials and congressional Republicans alarmed by its enormous economic and political stakes.

The Commerce Department submitted the report to the White House in mid-February, triggering a 90-day period for Trump to decide whether to impose tariffs, which could reach as high as 25 percent, on imported autos. It concluded that Trump could justify the tariffs on national security grounds and offered a range of options in response — putting the decision in the president’s hands, four people familiar with its conclusions told POLITICO.


Although the existence of the report was previously known, the administration has kept its findings hidden — including from a powerful Republican senator who has demanded to see it — and its conclusion had not been previously reported.

Trump has not yet made a decision, but he has long complained that the U.S is exploited economically by its allies and has repeatedly told aides he wants to impose a “ring tax” around U.S. borders to protect the country from foreign imports. Trump also has a particular interest in foreign auto competition: In a 2017 interview with the German newspaper Bild, he complained that Manhattan’s Fifth Avenue was filled with Mercedes-Benzes, adding: “It’s not mutual. How many Chevrolets do you see in Germany?”

But Trump’s senior economic advisers are almost universally opposed to slapping new tariffs on auto imports, warning of dire economic and political consequences. They argue that the tariffs would infuriate close U.S. allies from Asia to Western Europe. German Chancellor Angela Merkel said last month that the idea German cars threaten the U.S. would be “a shock.” The move could also undermine efforts to persuade Congress to approve the U.S.-Mexico-Canada trade deal.

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And while Trump can brag that he is standing up for American workers, imposing tariffs could ratchet up the price of cars by several thousand dollars, depending on the model, analysts warn.

The issue is roiling inside the White House ahead of a mid-May deadline for Trump to decide, 90 days after the submission of the Commerce Department report. Nervous Trump officials have already discussed searching for ways to delay the decision, possibly for several months.

Even some Trump advisers who have backed other Trump tariffs are wary this time. U.S. Trade Representative Robert Lighthizer — who has frequently sided with Trump’s more protectionist advisers — has privately raised concerns about imposing the auto tariffs, according to two senior administration officials.

“There’s a decided lack of enthusiasm here for these tariffs,” said a senior administration official, describing the view among the president’s advisers.

Lighthizer and other senior Trump aides worry that the auto tariffs would kill the goodwill they've built with lawmakers of both parties as they've tried to persuade them to approve the USMCA. White House officials see the success of the USMCA talks as key to Trump's 2020 election bid.

One notable exception is trade adviser Peter Navarro, an unapologetic protectionist who enjoys a close relationship with Trump. That has other officials concerned that Trump might ignore the advice of his other aides and order the tariffs.

The president’s move would come as a result of the Commerce Department’s investigation under Section 232 of the Trade Expansion Act of 1962, an obscure law that the president has already used to impose steel and aluminum tariffs. The provision requires an investigation concluding that foreign imports threaten U.S. national security before tariffs can be imposed on them.

The president’s decision could set up a showdown between the White House and increasingly rebellious Capitol Hill Republicans. Two Senate GOP lawmakers have already introduced legislation that would limit the president’s ability to impose tariffs.

Some Republicans are frustrated that the administration has refused to divulge the report’s details. Commerce Secretary Wilbur Ross, who delivered the report to Trump last month, has ignored multiple requests from Senate Finance Committee Chairman Chuck Grassley (R-Iowa) to turn over a copy, according to a committee source.

Spokespeople for the White House and the Commerce Department declined to comment, and a Lighthizer spokeswoman did not respond to requests for comment.

The Commerce Department did brief Senate Finance Committee Republicans on the report’s findings last month, according to two senior GOP aides. But while the department’s briefer strongly suggested that the report contained a national security finding allowing Trump to impose tariffs, and said that it laid out several options for him, the emissary did not disclose the report’s rationale or detail those options.

The lack of information has frustrated lawmakers and trade groups. "This is a major policy decision that would have a significant impact on an industry that employs directly and indirectly 10 million Americans. If in fact this report is a secret plan to tax hard-working Americans, we ought to know about it. It’s as simple as that,” said John Bozzella, the president and CEO of Global Automakers Group and a former Chrysler executive.

“Every automaker would be impacted in some way, shape or form. If you just assume that we are declared a national security threat and the president imposes broad, sweeping import tariffs of 25 percent, then you would naturally see the prices of all of these cars increase in a range of $2,000 to $7,000,” said Jennifer Thomas, the vice president of federal government affairs at the Alliance of Automobile Manufacturers, the leading advocacy group for the auto industry.

The debate over auto tariffs follows the president’s imposition of far-reaching tariffs on steel and aluminum imports from the European Union, Canada, Mexico and other countries, a controversial move that many Trump advisers cautioned against. Gary Cohn, Trump’s top economic adviser at the time, resigned last spring after failing to persuade the president to hold off on the tariffs.

Republican lawmakers are already readying legislative responses that would curtail the president’s ability to unilaterally impose tariffs, and Grassley has said he is supportive of the initiatives.

One bill, introduced by Sen. Rob Portman of Ohio, would require the Department of Defense, rather than the Department of Commerce, to conclude that the industry in question poses a national security threat justifying the imposition of tariffs and allow Congress to disapprove of any 232 finding. Another proposal, introduced by Sen. Pat Toomey of Pennsylvania, goes even further, requiring Congress to approve the president’s plan to impose import tariffs for it to take effect.

GOP lawmakers suspect the Commerce Department is reverse-engineering its reports to suit the president’s policy preferences, finding a national security threat where none exists. They have pointed to the Defense Department’s finding that steel and aluminum imports did not pose a national security threat — a finding that broke with the Commerce Department’s conclusion granting Trump a green light to crack down on metal imports.

“With regard to steel and aluminum and the 232 tariffs that were put in place back in 2017, you may know this, but when the administration was asked to opine on it, the Department of Defense said it’s not a national security threat. That’s now public,” Portman said on the Senate floor when he introduced his bill. “The memo from the Department of Defense said we have enough steel production in this country to take care of our military needs. It’s not a national security issue for us.”

The administration is expected to publicly release the report, though it is unclear when.

Trump believes that the mere threat of auto tariffs gives him leverage in trade negotiations with the European Union and other countries, according to aides. Navarro has also privately raised concerns that leaks about the widespread opposition to the tariffs could weaken the president’s negotiating posture.

Asked about the prospect that he would move forward with auto tariffs against the European Union, Trump said last month that “it’s something we certainly think about.”

“We’re trying to make a deal,” he said. “They’re very tough to make a deal with, the EU. … We’re negotiating with them. If we don’t make the deal, we’ll do the tariffs.”

Auto executives say the industry is particularly anxious given that the steel and aluminum tariffs imposed by the president last year have already hurt their companies, pushing costs up and sales down.

“More than anything,” the Auto Alliance’s Thomas said, “our companies like certainty and predictability, and they’re just not finding much of it these days.”