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NEW TARIFF INCREASE IS A BLOW TO AMERICAN CONSUMERS, ACCORDING TO AIAM

 NEW TARIFF INCREASE IS A BLOW TO AMERICAN CONSUMERS,
 ACCORDING TO AIAM
 WASHINGTON, June 24 /PRNewswire/ -- "Today's decision by the House Ways and Means Committee to increase the tax on imported minivans and sport utility vehicles is bad news for American consumers and the American economy," said George Nield, president of the Association of International Automobile Manufacturers.
 The decision reclassifies "motor vehicles principally designed for the transport of persons" to "motor vehicles for the transport of goods" and will subject minivans and sport utility vehicles to a 25 percent tariff, 10 times the current tariff rate of 2.5 percent.
 With the 25 percent import tax approved, the soon-to-be-released study by the Citizens for a Sound Economy (CSE) concludes the average price of imported minivans and sport utility vehicles will increase by up to $3,739. CSE further found that the price increase will inevitably be chased by the Big Three automakers with an average price increase of $1,331 for domestic models. Since over 1.4 million of these vehicles are sold each year by the Big Three in the United States, this could translate into more than a $1.8 billion hidden tax on American families who purchase these vehicles.
 "Reclassification doesn't make sense, as all other countries recognize these vehicles are clearly designed to carry people, not goods," said Nield. "Moreover, it gouges consumers by dramatically increasing the retail price of imports and allowing domestic manufacturers to raise their prices," he added. Nield cited previous studies by the Brookings Institute, the Institute for International Economics, and the International Monetary Fund which demonstrate that increases in import prices are accompanied by price increases by the Big Three automobile manufacturers.
 "In addition to creating less choice and higher prices for American consumers," said Nield, "this tariff measure also harms U.S. exporters by inviting retaliation through higher tariffs and other import barriers on U.S. exports including aerospace and agricultural products. This does considerable harm to the U.S. economy, particularly when we are relying on exports to get us out of the current recession."
 -0- 6/24/92
 /CONTACT: Charles Lockwood, 703-525-7788, or Annie Howell, 202-434-8519, both for the Association of International Automobile Manufacturers/ CO: Association of International Automobile Manufacturers, Inc. ST: District of Columbia IN: AUT SU:


DC -- DC021 -- 3368 06/24/92 14:40 EDT
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Publication:PR Newswire
Date:Jun 24, 1992
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