After General Motors announced Monday that they were closing three US assembly plants and laying off thousands of employees, President Trump threatened on Wednesday to increase import taxes for passenger cars to be more similar to those of trucks. He used his Twitter account to do so. In two separate tweets spaced five minutes apart, Trump claimed that the tariff on trucks is one of the reasons they sell well in America. He suggested that his administration could look into expanding that 25 percent tariff to all passenger cars, which would ensure that more vehicles are built in the United States.
On Wednesday, Robert Lighthizer, a US Trade Representative, said that Trump has ordered a review for the auto trade war currently happening with China. Because of the United States’ decision to put a 27.5 percent tariff on all Chinese vehicles imported into the US, China is forcing a 40 percent tariff on any American vehicles that are exported to their country. Xi Jinping, the Chinese leader, and Trump plan to meet at the summit in Buenos Aires late last week.
However, it should be noted that Trump’s tweets on Wednesday only seem to focus on vehicles imported from European and Asian countries because Canada and Mexico recently negotiated a new trade agreement covering all three significant North American markets.
This new tax that instills a 25 percent tariff on any imported trucks has dated back to the trade war of the 1960s between Western Europe and the United States, which began based on American poultry taxes. Therefore, many people jokingly refer to the truck tariff as a chicken tax.