‘Short-Term’ tariff pain worth it for auto industry, Ohio senator says

Bloomberg
03-04

Tariffs on imports from Canada and Mexico will be worth the pain it causes the auto industry because it can help curb the flow of undocumented migrants and illegal drugs to the U.S., said Republican Senator Bernie Moreno.

“Trump’s 100 per cent right, and all of us should rally around his demand that our two neighbors step up,” the Ohio lawmaker said in interview last week. “Until they do what they need to do, yes, am I willing to take some amount of short-term pain? Absolutely, 100 per cent.”

President Donald Trump on Monday said there is “no room left” for the U.S. trading partners to prevent the tariffs from taking effect on Tuesday. Auto industry leaders have warned the measures pose major risks to industry profits, employment and sales, while lobbyists for carmakers based near Detroit have argued vehicles that comply North American parts-sourcing rules should be exempt from new levies.

Nearly 100,000 people in Ohio are employed by auto and related industries, and the state is the largest producer of engines and second-biggest producer of transmissions in the U.S., according to economic development officials in the state. Automakers including General Motors Co., Stellantis NV and Honda Motor Co. have factories there.

Moreno last week introduced legislation supported by GM, Stellantis and Toyota that seeks to loosen current fuel economy and emissions standards and revoke California’s power to set its own clean-air rules.

Moreno said the moves would make the auto industry healthier by giving it flexibility and long-term stability. The bill also proposes a new 200 per cent tax deduction on autoworker wages, provided employers meet certain criteria, which Moreno said could help offset pressure from the tariffs.

Trump has framed the tariffs as a way to get Canada and Mexico to do more to slow the flow of migrants and illegal drugs, especially fentanyl into the US.

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