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Trump to Receive Auto Tariff Report, Setting Up Another Fight

Volkswagen cars at a port in Emden, Germany, waiting to be exported. A long-awaited report by the Commerce Department will outline whether imports of foreign cars pose a national security threat.Credit...David Hecker/EPA, via Shutterstock

WASHINGTON — The Commerce Department is expected to submit a report to President Trump in the coming days that could give the United States authority to impose tariffs on foreign cars and car parts on the basis of protecting national security, setting up another potential skirmish with America’s trading partners.

An administration official confirmed that the report would be submitted to the White House before a Feb. 17 deadline. The president has 90 days to make a determination on auto tariffs after receiving the report, which is not expected to immediately be made public.

The document stems from Mr. Trump’s request to the department last year to investigate whether imports of automobiles pose a threat to national security. It remains unclear exactly what the Commerce Department will recommend, but analysts say they expect the document to outline a range of options for the president, whether that means doing nothing or imposing tariffs or quotas on imported cars and parts.

While Mr. Trump has long threatened to hit allies like Europe with car tariffs, it is not clear whether he will actually take that step. The administration is fighting multiple trade battles at once, including with China, and other countries have warned Mr. Trump that any move to impose tariffs would warrant reciprocal action.

The United States’ auto industry, including automakers like General Motors, has also urged the administration not to proceed with tariffs, which they say would hobble companies in the country and raise prices for consumers. The car industry, along with other American industries, still bears the brunt of Mr. Trump’s steel and aluminum tariffs and retaliatory tariffs from other countries.

Republican lawmakers have also begun pressuring the president to back off.

“Raising tariffs on cars and parts would be a huge tax on consumers who buy or service their cars, whether they are imported or domestically produced,” Senator Charles E. Grassley, Republican of Iowa and the chairman of the Senate Finance Committee, said on Thursday. “Tariffs are not a long-term solution, and nobody wins in the end.”

Mr. Grassley cited data from the Tax Foundation that showed a 25 percent tariff on car imports would amount to a $73.1 billion tax increase and pointed to figures from the Center for Automotive Research that found that such a tariff on auto imports would also result in the loss of over 700,000 jobs.

According to Henrietta Treyz, the director of economic policy research at Veda Partners, these could include a broad tariff of 20 percent to 25 percent on all imports of cars and parts, higher tariffs on imports from China and Japan with exemptions for Europe, Canada, Mexico and South Korea. It could also include targeted tariffs on imports of automated and electric car components. Any of those possibilities are likely to spur resistance.

“Outcry and public pressure from the lobbying community has been mostly in hushed tones but release of the auto investigation should spur a new age in the Trump/business community dynamic,” Ms. Treyz said.

Despite Mr. Trump’s intent to protect the automobile industry, most of it remains united in opposition to tariffs.

“We’re not always united on public policy issues, but we’re united on this,” said Matt Blunt, the president of the American Automotive Policy Council. “Every auto manufacturer and parts manufacturer that I am aware of thinks this would be a mistake.”

Ann Wilson, the senior vice president of government affairs at the Motor and Equipment Manufacturers Association, warned that restricting imports of car parts would make American manufacturers less competitive. She urged lawmakers to push back against the administration if it moved forward with tariffs.

“This is the time that members of Congress, governors and local officials need to pay very close attention to the impact that these tariffs will have on the manufacturing base and on their constituents,” Ms. Wilson said. “This will have ramifications all through manufacturing sector and supply chains.”

Some Republican lawmakers who have been frustrated by the effect of the steel and aluminum tariffs have proposed legislation that would curb the president’s ability to impose tariffs on national security grounds. Congressional aides have suggested that the White House wants to keep the report confidential so that Mr. Trump maintains leverage in current trade negotiations.

European Union officials have warned that if Mr. Trump imposes tariffs on car imports from Europe that it would derail their coming trade negotiations.

Although Mr. Trump likes to remain unpredictable on trade, he has made clear that he has a preference for tariffs. The president underscored that point on Friday when discussing the possibility of extending a deadline to raise tariffs on Chinese imports.

“Well, you know, you’re talking to the wrong person, because I happen to like tariffs, O.K.?” he said.

A version of this article appears in print on  , Section B, Page 3 of the New York edition with the headline: Trump to Receive Auto Tariff Report, Setting Up Fight With an Ally. Order Reprints | Today’s Paper | Subscribe

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