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Automakers Hope Junker-Trump Meeting Will Help To Resolve Tariff Issue

NOEL KING, HOST:

President Trump will meet today with Jean-Claude Juncker, the president of the European Commission, and they will be talking about trade. President Trump criticizes the EU for what he sees as unfair trade practices with the U.S. His administration has already put tariffs on metals imported from the EU and is considering taxes that would hit cars and car parts. Here's President Trump at a Made in America event on Monday.

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PRESIDENT DONALD TRUMP: The European Union's been very tough on the United States, but they're coming in to see me on Wednesday. And we'll see if we can work something out. And, otherwise, we'll have to do something with respect to the millions of cars that they send in every year. But, maybe we can work something out.

KING: Maybe, says the president. With me now in studio is John Bozzella. He's president of the Association of Global Automakers. That's a trade group that represents international automakers that have operations here in the United States. Good morning.

JOHN BOZZELLA: Good morning.

KING: All right. So your organization represents companies like Toyota, Honda, Kia. These are not U.S.-based companies, but they do have operations here. What are you hearing from them as the Trump administration considers these tariffs?

BOZZELLA: Yeah. You know, I'm hearing great concern. We're already seeing an impact on the auto industry and on autoworkers from the tariffs already in place, whether it's steel and aluminum or the tariffs between the United States and China. So there's real concern out there. No question about it.

KING: What are you hoping happens today between President Trump and President Juncker?

BOZZELLA: Yeah. That's a really good question. I think if we can avoid additional tariffs and move toward a discussion about more trade and more trade agreements, that would be a terrific outcome. Our future for the American auto industry is through exports. We need more opportunities to export more cars and trucks built by Americans to countries all around the world.

KING: So how do we get to that point? What would you advise the president?

BOZZELLA: We need more discussions about how to open markets. My concern is that through the tit for tat of tariffs and the potential for imposing huge taxes on imported cars and car parts - which, by the way, would raise prices on every car, including those made in America - that we're going to move in the opposite direction. What we need is to avoid putting up barriers and look for opportunities to reduce them so we can export all around the world.

KING: If the president does levy these tariffs on European cars and car parts, to be clear, that will make cars more expensive for American consumers?

BOZZELLA: There is no question about it. Remember, this is not only on imported cars, but it's on imported car parts. The most domestic car, the car with the most American content has about a quarter to a third of its content coming from other countries. So that car would have a tax on it, too. So it would raise prices, which will reduce demand, which will also hurt autoworkers.

KING: All part of the global supply chain. The Commerce Department, though, says it's considering these auto tariffs as part of a look at how auto imports affect national security. Are cars a national security issue?

BOZZELLA: You know, I really am mystified by this notion. Really, in fact, we have the most vibrant, competitive, thriving auto industry in the whole world today. And the reason that is is because we have 14 car companies producing cars and trucks here in the United States, doing research and development here in the United States. You know, just with international auto companies, there are 72 R&D facilities in 17 states all around the country who are contributing to a really strong and vibrant economy and auto industry here in the United States.

KING: So if it's not national security, what do you think it is?

BOZZELLA: Yeah. You know, that's a real - that's obviously a question for the Commerce Department, I think, and for the administration. But, you know, if it is about trying to get a better deal, there are better ways to do this.

KING: Earlier this year, you came on NPR and you warned about the potential impacts of tariffs on steel and aluminum. Now that those are in effect, have your fears proven true, and do you think we might see the same thing if tariffs are slapped on cars?

BOZZELLA: Unfortunately, my fears have come to pass. I can tell you I was on the phone with an executive of an automaker who's making cars in Indiana. He gets 100 percent of his steel from Indiana. The cost of that steel made in America has gone up 20 percent to 30 percent since the steel tariffs have gone into effect. And so what's happened is we've raised the cost of production in the United States that makes that plant less competitive.

KING: Very briefly, has he had to lay anyone off?

BOZZELLA: Not that I'm aware of yet, but I'm concerned that that could be the next step.

KING: John Bozzella is president of the Association of Global Automakers. Thank you, sir.

BOZZELLA: Thank you. Transcript provided by NPR, Copyright NPR.