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Experts say auto tariffs would be costly

DETROIT — Every workday, about 7,400 trucks mostly loaded with automotive parts rumble across the Ambassador Bridge connecting Detroit and Canada.

But if President Donald Trump delivers on threats to slap 25 percent tariffs on imported vehicles and components, there will be far fewer big rigs heading to factories that are now humming close to capacity on both sides of the border.

The tariff threat could be a negotiating ploy to restart stalled talks on the North American Free Trade Agreement. But it also could be real, since the administration already has imposed duties on $50 billion worth of Chinese imports, as well as steel and aluminum from China, the European Union, Canada and Mexico.

Tariffs against China include some autos and parts but if those spread to Canada and Mexico, the impact will be far larger because auto manufacturing has been integrated between the three countries for nearly a quarter century.

The Commerce Department said in a statement last week that it “has just launched its investigation into whether imports of auto and auto parts threaten to impair the national security. That investigation, which has only just begun, will inform recommendations to the president for action or inaction.”

If the wider auto tariffs are imposed, industry experts say they will disrupt a decades-old symbiotic parts supply chain, raise vehicle prices, cut new-vehicle sales, cost jobs in the U.S., Canada and Mexico, and even slow related sectors of the economy.

“It seems like it is going to be so devastating that I can’t imagine that they’re actually going to do it,” said Kristen Dziczek, vice president of labor and economics at the Center for Automotive Research.

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