Commerce Secretary Wilbur Ross on auto import probe: 'Economic security is military security'

Key Points
  • Commerce Secretary Wilbur Ross says his department's investigation will determine whether "abuse of trade tactics" in cars could harm the U.S.
  • "Economic security is military security. And without economic security, you can't have military security," he tells CNBC.
Wilbur Ross: Economic security is national security

Commerce Secretary Wilbur Ross told CNBC on Thursday that his department's investigation of imported cars will determine whether "abuse of trade tactics" could harm the U.S.

"National security is broadly defined to include the economy, to include the impact on employment, to include a very big variety of things," Ross said in a "Squawk Box" interview. "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 the surge in automobile imports over 20 years threatens to "impair" national security by "weakening" the U.S. economy.

President Donald Trump asked Ross to carry out the probe, which will be executed under Section 232 of the Trade Expansion Act of 1962. Trading partners expressed alarm about the possible tariffs that could result in a disruption in the auto industry around the world.

Toyota Motor U.S.-traded shares and domestic auto stocks, Ford and General Motors were flat in Thursday's premarket after the Commerce Department announced the probe.

Ross told CNBC that market share of imported cars has gone from 30 percent to 48 percent.

"There are over 8 million cars imported each year into the country," he said. "Part of the reason for the big imports coming in as opposed to our exports going out is we only have a 2.5 percent tariff on autos and auto parts."

Ross said he doesn't blame foreign countries, adding "they're doing what is best for them."

"The stupidity is that we let ourselves get into this box of extremely low rates," he said.

The Commerce Department under Ross recommended imposing heavy tariffs or quotas on foreign producers of steel and aluminum in February in the interest of national security. Ross said at the time that steel is important to U.S. national security and that current import flows are adversely affecting the steel industry.

Following the steel and aluminum tariffs, 20 plants in the U.S. have opened or reopened, Ross said, adding the tariffs are having the desired effect.

Before joining the White House, Ross made a fortune in the investment world, running W.L. Ross & Co., and buying stakes in distressed assets.