The Trump administration’s assertion that a decadeslong surge in auto imports could impact national security is not a solid argument, according to CNBC’s Jim Cramer.
“I thought it was a stretch to use defense,” Cramer said Thursday on “Squawk on the Street,” referring to Commerce Secretary Wilbur Ross’ comments on CNBC on Thursday. Ross said in a “Squawk Box” interview “national security is broadly defined,” adding, “economic security is military security; and without economic security, you can’t have military security.”
The Commerce Department said late Wednesday it started an investigation into whether more auto imports threaten to “impair” national security by “weakening” the U.S. economy.
National security is defined to include “the economy, to include the impact on employment, to include a very big variety of things,” Ross told CNBC.
Commerce claims imported passenger vehicles account for 48 percent of passenger vehicles sold in the U.S., up from 32 percent 20 years ago.
Cramer later on Thursday acknowledged that first-quarter 2018 showed an acceleration in the number of cars imported. But the “Mad Money” host warned auto tariffs would dramatically impact the United States’ relationships with foreign countries. “We would just have no relations with these countries,” he said.
“I’m not saying you would destroy their economies, but you would make it so they would go into a recession,” Cramer continued.
Toyota‘s U.S.-traded shares were lower on the news, while domestic auto stocks were mixed.
The Commerce Department, under Ross, recommended imposing heavy tariffs on foreign producers of steel and aluminum in February in the interest of national security.
Ross told CNBC on Thursday those steel and aluminum tariffs are having the desired effect, leading to nearly two dozen U.S. factories opening or reopening.
