National Taxpayers Union free trade director against Trump administration's tariffs

National Taxpayers Union Free Trade Initiative Director Bryan Riley

Tariffs, trade war, the U.S. government shutdown and now rumors of new tariffs on international vehicles are part of the Trump administration's "self-destructive" policies that could tank the nation's economy, a free-trade-initiative expert said during a recent interview.

"The current administration's policies have been incredibly self-destructive, particularly for the automobile industry," Bryan Riley, the National Taxpayers Union's Free Trade Initiative director, said during a Washington D.C. Business Daily telephone interview. "Drive up the price of steel and aluminum, and you're obviously going to hurt companies and businesses that rely on those goods.

"Car makers heavily rely on steel and aluminum, so it's essentially the Trump administration picking winners and losers," Riley said. "They're essentially saying, 'We're going to protect the steel and aluminum industry and we're going to penalize Americans and American workers who build cars, are in construction and who use steel and aluminum.'"

Riley also pointed out that the U.S. steel and aluminum industries support tariffs.

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"At least the Trump administration is doing something that an industry wanted," Riley said. "I think it's a bad idea, but I think it's understandable from that perspective."

Nevertheless, "pretty much nobody" wants the Trump administration to impose tariffs on imported cars or parts, Riley said.

"It's not like U.S. automakers are running to Washington and begging for tariffs; it's quite the opposite," he said. "It's really a bizarre act by the administration to even contemplate putting tariffs on automobiles and parts."

Last year, the Trump administration slapped tariffs on various goods, including solar panels and washing machines, and the aluminum and steel used by auto manufacturers and their downstream suppliers. The administration placed a 25 percent tariff on hundreds of categories of goods imported into the U.S. from China.

As the trade war has dragged on, global auto executives have urged the Trump administration to end the dispute, claiming the ever-shifting market is doing their industry no good and that auto tariffs could make things worse.

The rumored tariffs on imported automobiles and parts could add thousands of dollars to the prices of new cars and trucks, Riley said.

"Consumers will do one of two things," he said. "They'll postpone their buying decisions or they'll buy used cars."

Used cars is one part of the U.S. economy that might benefit from tariffs on automobiles and parts, at least in the short term, Riley said.

"This is assuming, of course, that these tariffs go into effect, that they apply to Japan and they apply to the E.U. and they apply to Canada and they apply to Mexico," he said. "Who knows what the final composition will be, but any time we apply tariffs, which basically are just taxes, we make products more expensive."

The tariffs would harm downstream industries, including obvious ancillary companies such as finance and auto rentals, but they also can indirectly affect less obvious parts of the economy, Riley said. A consumer who has to spend more to buy a car with a price jacked up by tariffs is left with that much less money to spend elsewhere.

"That's money they could have spent renovating their house or on something else," Riley said.

Multiplied by millions of consumers,  it becomes clear that tariffs would have a long-reaching impact, Riley said.

"It's bad for every aspect of the U.S. economy," he said. "That's why it's just mind-boggling that this administration is even contemplating this action."

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