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Tesla, Ford, Daimler, Volvo Sue U.S. Over China Tariffs

Carmakers press for a resolution to 2-year-old trade war
#Ford #Daimler #Volvo

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Four carmakers have filed lawsuits to halt tariffs imposed by the Trump administration on components imported from China.

Daimler, Ford, Tesla and Volvo—who claim the levies are illegal—filed their lawsuits earlier this week with the U.S. Court of International Trade in New York City, the Guardian reports.

Festering Trade War

The complaints concern the continuing effects of the trade war with China that began in July 2018, when the U.S. imposed a 25% tariff on $34 billion worth of Chinese imports. China promptly responded with similar tariffs on American goods.

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By this time last year, the U.S. was imposing levies ranging from 10% to 25% on about $350 billion worth of Chinese goods.

The White House justified its actions by citing the Trade Act of 1974, whose Section 301 gives the president broad powers to address what he perceives as unreasonable or discriminatory trade practices that restrict the ability of U.S. companies to compete.

Carmakers’ Lament

Tesla’s filing condemns the 25% tariffs it has been paying on display screens and other components from China as “arbitrary, capricious and an abuse of discretion.”

The lawsuit, which includes U.S. Trade Representative Robert Lighthizer as a defendant, asks the court to order a refund, with interest, on the fees paid to date, according to media reports.

Daimler’s complaint accuses the White House of “prosecution of an unprecedented, unbounded and unlimited trade war” that it says now impacts $500 billion worth of goods from China, the Guardian says.

The German company asserts that U.S. law does not allow the Trump administration to “litigate a trade war for however long, and by whatever means, they choose.”

Bottom Line

The automakers’ lawsuits signal their impatience with the trade war and its toll on their operations.

China and the U.S. agreed in January to a very narrow “Phase-One” pact to bolster Chinese purchases of American goods, including cars. But progress in fulfilling the goals has been slow.

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