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US automakers to Trump: Don’t slap tariffs on imported cars

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America’s auto industry is bracing for a potential escalation in U.S. President Donald Trump’s tariff war with the world, one that could weaken the global auto industry and economy, inflate car prices and trigger a backlash in Congress. 

Late Sunday, the Commerce Department sent the White House a report on the results of an investigation Trump had ordered of whether imported vehicles and parts pose a threat to U.S. national security. Commerce hasn’t made its recommendations public, and the White House has so far declined to comment. If Commerce did find that auto imports imperil national security, Trump would have 90 days to decide whether to impose those import taxes.

Trump has repeatedly invoked his duty as president to safeguard national security in justifying previous rounds of tariffs. An obscure provision in trade law authorizes a president to impose unlimited tariffs on particular imports if his Commerce Department concludes that those imports threaten America’s national security.

Whatever Commerce has concluded in this case, Trump has made clear his enthusiasm for tariffs in general and for auto tariffs in particular. Some analysts say they think Commerce has likely endorsed the tariffs, not least because the president has conveyed his preference for them.

Among Commerce’s recommendations “will certainly be tariffs because, hey, he’s a tariff man,” said William Reinsch, a former U.S. trade official and now a senior adviser at the Center for Strategic and International Studies, referring to a nickname that Trump gave himself.

Industry conference call to discuss what might happen

Industry officials took part in a conference call Tuesday to discuss the possible steps Trump could take. They include tariffs of up to 25 per cent on imported parts only; on assembled vehicles only; or on both vehicles and parts — including those from Mexico and Canada. The last option would be an especially unusual one given that the United States, Mexico and Canada reached a new North American trade deal late last year, and the legislatures of all
three nations must still ratify it.

In public hearings last year, the idea of imposing import taxes on autos drew almost no support. Even U.S. automakers, which ostensibly would benefit from a tax on their foreign competitors, opposed the potential tariffs. Among other concerns, the automakers worry about retaliatory tariffs that the affected nations would impose on U.S. vehicles. Many U.S. automakers also depend on imported parts that could be subject to Trump’s tariffs and could become more expensive.   

A similar Commerce investigation last year resulted in the Trump administration imposing taxes on imported steel and aluminum in the name of national security. The administration has adopted an extraordinarily broad view of national security to include just about anything that might affect the economy.

In addition to steel and aluminum, Trump has imposed tariffs on dishwashers, solar panels and hundreds of Chinese products. Targeting autos would further raise the stakes. The United States imported $340 billion in cars, trucks and auto parts in 2017.

If this, then that

If the administration imposed 25 per cent tariffs on imported parts and vehicles including those from Canada and Mexico, the price of imported vehicles would jump more than 17 per cent, or an average of around $5,000 each, according to estimates by IHS Markit. Even the prices of vehicles made in the U.S. would rise by about 5 per cent, or $1,800, because all of them use some imported parts.

Luxury brands would absorb the sharpest increase: $5,800 on average, IHS concluded. Mass-market vehicle prices would rise an average of $3,300.

If the tariffs were fully assessed, IHS predicts that price increases would cause U.S. auto sales to fall by an average of 1.8 million vehicles a year through 2026. Auto industry officials say that if sales fall, there almost certainly will be U.S. layoffs. Dealers who sell German and some Japanese brands would be hurt the most by the tariffs.

“The economic fallout would be significant, with auto tariffs hurting the global economy by distorting prices and creating inefficiencies, and the impact would reverberate across global supply chains,” Moody’s Investors Service said in a report. “The already weakening pace of global expansion would magnify global growth pressures, causing a broader hit to business and consumer confidence amid tightening financial conditions.”

Congress could resist the auto tariffs. Sens. Pat Toomey, R-Penn., and Mark Warner, D-Va., have introduced legislation to reassert congressional control over trade. Their bill would give Congress 60 days to approve any tariffs imposed on national security grounds. It would also shift responsibility for such investigations away from Commerce to the Pentagon.

Using tariffs as leverage

Some analysts say they suspect that Trump intends to use the tariffs as leverage to pressure Japan and Europe to limit their auto exports to the United States and to prod Japanese and European automakers to build more vehicles at their U.S. plants.

Reinsch notes that Trump’s top trade negotiator, Robert Lighthizer, worked in the Reagan administration, which coerced Japan into accepting “voluntary” limits on its auto exports.

“This is the way Lighthizer thinks,” Reinsch said.

Even if the tariff threat resulted in negotiations, Europe and Japan would have demands of their own. A likely one: Compelling the U.S. to drop its longstanding 25 per cent tax on imported light trucks.

Trump is “pursuing something that, as near as I can tell, the domestic (auto) industry doesn’t want,” Reinsch said. “Once he pursues it, he is going to be under pressure to give up the one thing the auto industry really does want” — the U.S. tariff on imported light trucks.

For now, many in the industry are upset that the Commerce Department report remains secret, feeding uncertainty. 

“The 137,000 people who work for Toyota across America deserve to know whether they are considered a national security threat,” Toyota said in a statement Tuesday. “And the American consumer needs to know whether the cost of every vehicle sold in the U.S. may increase.”

The American International Automobile Dealers Association this week called the Commerce Department’s investigation “bogus.”

“Now, dealerships must continue to operate under a cloud of uncertainty, not knowing if at any moment their products will be slapped with 25 per cent tariffs, raising vehicle and repair costs by thousands of dollars and slashing sales,” the association’s CEO, Cody Lusk, said in a statement.

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Ottawa education workers still teaching special-ed students at schools want safety checks

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Some Ottawa educators say they are concerned about the safety of classrooms that remain open in schools for special-education students.

Ontario elementary and secondary students have been sent home to study virtually because of the dangers posed by rising rates of COVID-19. However, special-education classes are still operating at many bricks-and-mortar schools.

The special-education classes include students with physical and developmental disabilities, autism and behaviour problems. Some don’t wear masks and require close physical care.

Two unions representing teachers and educational assistants at the Ottawa-Carleton District School Board have sent letters to Ottawa Public Health expressing their concerns.

It’s urgent that public health officials inspect classrooms to assess the safety of the special-ed classes, said a letter from the Ottawa branch of the Ontario Secondary School Teachers’ Federation, which also represents the educational assistants who work with special-needs children.

“In the absence of reasons based on medical evidence to keep specialized systems classes open, we are unsure as to the safety of staff and students in these programs,” said the letter signed by president Stephanie Kirkey and other union executives.

The letter said staff agreed that students in specialized classes had difficulty with remote education and benefited most from in-person instruction.

“Our members care deeply about the students they work with and are not only concerned about their own health and safety, but also about that of their students, as they are often unable to abide by COVID safety protocols that include masking, physical distancing and hand hygiene, thus making it more likely that they could transmit the virus to one another,” the letter said.

The Ottawa-Carleton District School Board has 1,286 elementary and secondary students in special-education classes attending in person at 87 schools, said spokesperson Darcy Knoll.

While final numbers were not available, Knoll said the board believed a large number of the special-education students were back in class on Friday at schools.

In-person classes for other elementary and secondary students are scheduled to resume Jan. 25.

The school boards provide PPE for educators in special-education classes as required, including surgical masks, face shields, gloves and gowns.

Several educators interviewed said they don’t understand why it has been deemed unsafe for students in mainstream classes to attend class, but not special-ed students.

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Ottawa sets record of 210 new COVID-19 cases following lag in data reporting

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Ottawa has now broken its daily record for new COVID-19 cases twice in 2021, with 210 new cases added on Friday amid a lag in data reports from earlier in the week.

The nation’s capital has now seen 10,960 cases of the novel coronavirus.

Ottawa Public Health’s COVID-19 dashboard reports 977 active cases of the virus in Ottawa, a jump of more than 100 over Thursday’s figures.

One additional person has died in relation to COVID-19 in Ottawa, raising the city’s death toll in the pandemic to 395.

The record-setting case count comes a day after Ottawa reported a relatively low increase of 68 cases. Ontario’s COVID-19 system had meanwhile reported 164 new cases on Thursday.

OPH said Thursday that due to a large number of case reports coming in late Wednesday, the local system did not account for a large portion of cases. The health unit said it expects the discrepancy to be filled in the subsequent days.

Taken together, Thursday and Friday’s reports add 278 cases to Ottawa’s total, a daily average of 139 cases.

The new single-day record surpasses a benchmark set this past Sunday, when the city recorded 184 new cases.

Ontario also reported a new record of 4,249 cases on Friday, with roughly 450 of those cases added due to a lag in reporting in Toronto.

The number of people hospitalized with COVID-19 also continues to climb in Ottawa. OPH’s dashboard shows there are currently 24 people in hospital with COVID-19, seven of whom are in the intensive care unit.

Three new coronavirus outbreaks were added to OPH’s dashboard on Friday. One outbreak affects a local shelter where one resident has tested positive for the virus, while the other two are traced to workplaces and private settings in the community.

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Ottawa family dealing with mould issue in apartment grateful for support

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OTTAWA — An Ottawa family, who has been dealing with mould in their south Ottawa apartment, is grateful for the support they have received from the community.

“I would like to say big very mighty, big thank you to everyone,” says Nofisat Adeniyi.

Adeniyi lives with her three sons in a South Keys apartment. Her son Desmond turned to social media on Sunday to seek help for the family, saying they’ve been dealing with mould in their unit and it has taken too long to fix.

“I see my mom go through a struggle everyday; with three kids, it’s not easy,” says 16-year-old Desmond Adeniyi.

He setup a GoFundMe page to help the family raise money to move out. After gaining online attention and the story, which originally aired CTV News Ottawa on Tuesday, they have been able to raise over $30,000.

“Yes! I was surprised, a big surprise!” says Nofisat Adeniyi, “We are free from the mess that we’ve been going through.”

The family was so touched, they decided to pay it forward and donated $5,000 to another family in need, “A lady my son told me about,” says Nofisat Adeniyi.

The recipient wants to remain anonymous, but when she found out from Adeniyi, “She was crying, she has three kids; I remember when I was, I can feel what she’s feeling – because I was once in those shoes.”

CTV News Ottawa did reach out to the property management company for an update on the mould. In a statement on Wednesday, a spokesperson for COGIR Realty wrote:

“We respect the privacy of our residents and are unable to disclose any specific information regarding any of our residents. We can, however, let you know that we are working with the residents and are making every effort to resolve this matter as soon as possible,” said Cogir Real Estate

The giving did not stop at just cash donations. “When I saw the segment, the thing that struck me the most was how easily the situation can be resolved,” says mould removal expert Charlie Leduc with Mold Busters in Ottawa.

Leduc is not involved in the case, but appeared in the original story, and after seeing the mould on TV wanted to help.

“This isn’t something that we typically do, but given the circumstance and given the fact that this has gone on way too long, our company is willing to go in and do this work for free,” said Leduc.

The Adeniyi family may now have some options, and are grateful to the community for the support.

“Yes, It’s great news — you can see me smiling,” says Nofisat.

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