(Bloomberg) -- President Donald Trump’s threat to impose sweeping new tariffs on imported automobiles may be an attempt to pressure his Nafta partners into striking a deal that would help drive manufacturing jobs back to the U.S.
Trump directed Commerce Secretary Wilbur Ross on Wednesday to initiate a so-called Section 232 national security investigation into imports of cars, trucks and vehicle parts that could possibly lead to tariffs.
These investigations can take months to conclude. In the meantime, the clock is ticking to clinch a Nafta deal that can be voted on by the current Congress this year. An agreement over auto-production rules has been one of the key sticking points in nine months of talks.
The looming threat of auto levies could further weigh on Mexico and Canada, which have a large stake in the U.S. auto market as the two biggest foreign suppliers of vehicles.
Any attempt to use the auto-import probe as leverage is unlikely to work, said Bill Reinsch, Scholl Chair at the Washington-based Center for Strategic and International Studies.
“A deal on autos is within reach but the other U.S. demands remain unresolved, and Canada and Mexico are not going to ag