by Alessandra Cardone
ROME, May 25 (Xinhua) -- The United States investigation into car imports may have negative impacts on both domestic carmakers and the whole sector, according to Italian media and analysts.
U.S. President Donald Trump announced on Wednesday that he had instructed the Commerce Department to launch an investigation into automobile imports under Section 232 of 1962 Trade Expansion Act, which would allow Washington to introduce tariffs on national security ground.
Washington had cited a similar security provision when it proposed to introduce additional tariffs on steel and aluminium imports in March. As such, the recent announcement may lead to an increase in U.S. tariffs on foreign car, trucks, and vehicle parts up to 25 percent.
Considering Italy's major auto manufacturer, Italian-American Fiat-Chrysler Automobiles (FCA), it may suffer partial effects despite having some of its production in the United States, according to Italian leading business daily Il Sole 24 Ore.
"With regards to FCA Group, the measure might impact negatively on Alfa and Maserati brands, with possible obstacles emerging also in production and export of some Jeep models from Europe," the newspaper wrote on Friday.
In case U.S. tariffs were indeed increased after the investigation was closed, Il Sole said Alfa Romeo in particular "might face enormous difficulty in boosting its share in a market where Germans already have brand recognition and a partial local production."
Analysts with Mediobanca Securities explained in a note that Trump's decision was probably a move to put pressure on Canada and Mexico, in order to obtain some concessions in the ongoing renegotiation of NAFTA (North Atlantic Free Trade Agreement).
"Although it is not yet clear which could be the countries impacted by new tariffs, this news could have a negative impact on the whole sector, adding some volatility to (global) major car-makers," the note seen by Xinhua read.
As for FCA Group, despite its strong production capacity in the United States, Mediobanca Securities experts also said new tariffs might affect its production in Mexico and its sales of Alfa Romeo models from Italy to the United States.
Italy was the seventh largest vehicles and light trucks exporter to the United States in terms of value in 2017, after Mexico, Canada, Japan, Germany, South Korea, and UK, according to statistics by the international trade administration of the U.S. Commerce Department.
On the other hand, the United States were the first vehicle export market for Italy -- absorbing 18 percent of the whole sales abroad -- followed by Germany (12.5 percent), and France (12 percent), a report by Italian Association of Automotive Industry (ANFIA) showed.
However, European Union (EU) countries altogether counted for 54 percent of the exports.
The report was based on export data in the period from January to September 2017.
Overall, the automotive sector in Italy counts 3,200 companies, employing about 1.16 million people, some 252,000 of whom directly involved in vehicle production, according to ANFIA.
The whole supply chain's turnover was about 82 billion euros (95.6 billion U.S. dollars), equal to 5 percent of Italy's gross domestic product, and sales abroad reached 39 billion euros in 2016, the association said in December. (1 euro = 1.17 U.S. dollars)
