Trade gap

Trump: Trade gap, not autos, poses national security threat

By DOUG PALMER

President Donald Trump says imports of autos and auto parts do not pose a national security threat, but the U.S. balance sheet with the rest of the world does.

"Well, no," Trump told Fox Business News' Maria Bartiromo in an interview aired Friday when asked whether the automotive imports pose a national security threat. "What poses a national security risk is our balance sheet. We have to have — we need a strong balance sheet. Otherwise, you don’t have national security."

Last year, the Commerce Department launched an investigation into whether imports of autos and auto parts pose a national security threat to the United States. A positive finding would allow Trump to impose restrictions on the imports, similar to the tariffs and quotas he imposed last year on steel and aluminum imports.

Still, Trump's answer seemed to suggest the still-confidential Commerce Department report, delivered to the White House last month, did not find a specific threat from automotive imports, but a more general threat from the trade imbalance that the United States runs with the rest of the world.

Whatever the finding, Trump indicated he still remains interested in imposing tariffs on cars from Europe and possibly other destinations — unless those companies invest more in the U.S.

"I’ll tell you what the end game is. They’ll build their plants in the United States, and they have no tariffs," Trump said.

The tariffs that Trump has imposed on steel and aluminum have boosted prices of those key materials and made the U.S. a less attractive place to build cars.

The U.S. and the European Union are currently in the process of preparing for negotiations on a trade agreement, although the effort remains stalled over the EU's refusal to include agriculture.

Still, in those proposed talks, the EU is offering to reduce its 10 percent tariff on autos to zero in exchange for the U.S. cutting its tariffs to 2.5 percent tariff on autos and 25 percent tariff on trucks to zero as well.

Trump, though, says he isn't interested in that deal.

"The problem is that the Chevrolet will never be accepted in Europe like the Mercedes is accepted here, so it’s not a good deal," Trump said. "I wouldn’t do that deal. They’ve offered me that deal,"

"So you wouldn’t do zero tariffs?," Bartiromo asked.

"I would do it for certain products, but I wouldn’t do it for cars — because they have BMW, they have Mercedes, they have a lot of very good cars that come in, and they make them here," Trump said. "I want them to make them here. Instead of making them over there, make them here. If you’re going to sell them to the Americans, make them here."