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Photo: Kevin Dietsch, Pool/Getty Images

Two of Trump's top economic advisers, including Larry Kudlow, fear that one of the proposals closest to his heart — automobile tariffs — would kill American jobs. And his lawyers aren't sure the national security argument underpinning the idea is solid. Meanwhile, U.S. allies and free traders have been freaking out over a Trump request to use a “national security” law — the same one he used to impose massive steel and aluminum tariffs — to put new tariffs of as much as 25% on automobile imports.

Between the lines: The proposal for these tariffs didn’t emerge from a policy process assessing the economic or geopolitical pros and cons of such an approach — they came from the president’s hard-wired instincts.

  • "He’s been talking about auto tariffs for over a year, but until now advisors had managed to convince him the costs outweighed any benefit," said a source familiar with the internal conversations. "But, at least as a matter of public posturing, he has now thrown caution to the wind."

Here’s what I’ve learned, from sources with knowledge of the sensitive discussions inside the Trump administration:

  • Kudlow, director of the National Economic Council, told colleagues in an internal meeting that these tariffs would hurt American consumers and probably have a negative effect on American jobs, according to two sources familiar with the conversations.
  • He pointed out that foreign automakers employ Americans in states like Alabama and Kentucky. And he said domestic auto dealers, factories and auto servicing businesses in the U.S. would potentially be hurt by these tariffs.
  • Kevin Hassett, the chairman of Trump’s Council of Economic Advisers, shares Kudlow’s concerns about the auto tariffs, according to a source familiar with his thinking. But Trump’s hardline trade adviser Peter Navarro thinks the tariffs are a great idea. 
  • Trump’s recent conversation with Japanese Prime Minister Shinzo Abe was much tougher than is publicly understood, according to two sources with knowledge of the discussion. Trump is furious about the way Japan has been treating American car companies, and believes Abe hasn’t done nearly enough to change the situation.

Why this matters: Auto tariffs would have massive consequences for the global economy. But they’re far from a lock. And they're not imminent — the White House counsel’s office has told the Trump team the process will take months to sort through. The big unanswered question, per a top trade lawyer: "Will the Commerce Department formally initiate this soon? All we have so far is a press release. Until we see a formal federal register notice and timeline for hearing/etc, few observers will think it's "real." 

  • "This is why the market reaction is so muted," he added. "Everyone thinks this is just a BS NAFTA negotiating ploy. If the federal register notice is published and NAFTA is punted ... Hoo boy!"

Go deeper

Updated 2 hours ago - Politics & Policy

Shooting at Michigan high school leaves 3 dead, 8 wounded

Police cars restrict access to Oxford High School following the shooting in Oxford, Michigan, on Tuesday. Photo: Matthew Hatcher/Getty Images)

A 15-year-old sophomore was arrested after a shooting at a Michigan high school that left three people dead and eight others wounded Wednesday, according to the Oakland County Sheriff's Office.

The latest: Oakland County Sheriff Michael Bouchard said at a briefing Tuesday night that the suspect's father had on Friday bought the 9mm Sig Sauer pistol investigators believe was used in the shooting at Oxford High School. Authorities released the names of the victims late Tuesday.

City Council member Andre Dickens wins Atlanta mayoral race

Atlanta Mayor-elect Andre Dickens in Atlanta, Georgia, late Tuesday. Photo: Paras Griffin/Getty Images

City Council member Andre Dickens won a runoff election Tuesday to become Atlanta's next mayor, soundly beating the council's president Felicia Moore.

The big picture: Dickens was just a few months ago considered to have an outside chance of replacing Mayor Keisha Lance Bottoms, who announced in May that she wouldn't seek a second term.

UN report: Pandemic set to cost global tourism $2 trillion in 2021

A tourist in front of the Eiffel Tower in Paris on Nov. 25. Photo:Chesnot/Getty Images

A new United Nations report warns that global tourism will see only modest revenue gains in 2021 after last year's historic losses amid the COVID-19 pandemic.

Why it matters: Tourism revenues in 2020 fell by more than half from the previous year — a significant blow to the global economy, according to analysis by the UN World Tourism Organization (UNWTO).