Automakers, Parts Makers Ask Trump to Reconsider 25% Tariff on Parts
Domestic and foreign automakers, auto dealers and MEMA, the suppliers' association, asked the treasury secretary, commerce secretary and U.S. trade representative to rescind the planned 25% tariff on auto parts, which is now planned for early May under a Section 232 national security action.
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"Tariffs on auto parts will scramble the global automotive supply chain and set off a domino effect that will lead to higher auto prices for consumers, lower sales at dealerships and will make servicing and repairing vehicles both more expensive and less predictable," wrote the six trade groups.
Moreover, they argued, many auto suppliers will have layoffs and go into bankruptcy because they don't have enough cash to manage "abrupt tariff induced disruption." Supply chains developed under duty-free trade under USMCA, and since NAFTA's renegotiation under Trump, suppliers' employment has grown, they said.
"It only takes the failure of one supplier to lead to a shutdown of an automaker's production line. When this happens, as it did during the pandemic, all suppliers are impacted, and workers will lose their jobs.
"We support more manufacturing and additional supply chains that run through the United States, but it is not possible to reroute global supply chains overnight or even in months. This will take time."