What Tariffs Mean for the Industry

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March 21, 2018—The Auto Care Association joined 44 other trade associations this week, representing a range of major companies in the business community, in a letter written to the White House urging the Trump administration not to impose tariffs on U.S. imports from China.

 While the groups support the administration’s efforts to address China’s discriminatory trade policies and practices, the Auto Care Association believes the imposition of tariffs would “trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers,” as stated in the letter.

 Speculation remains about how the tariffs will affect the automotive industry. Spokesman Tony Montana for the United Steelworkers (USW) said the organization believes the tariffs will bring stability to prices, while affording their members and families a measure of job and earnings security.

Yet he also said the USW cannot speculate on how it will affect auto manufacturers or the companies that supply its parts, many of which employ members of the union.

 General Motors released a statement:

 

“We purchase over 90 percent of our steel for U.S. production from U.S. suppliers. We need to fully understand all the details in order to assess the potential impact, but we are encouraged by the temporary exemption for Canada and Mexico. In the near term, there will be little impact to us from the tariff itself. We will be impacted by any general U.S.- sourced steel price increases, but we do not expect a material impact given the majority of our contracts are longer term. And for any longer term impact, we have shown we have the ability to adjust and adapt to a variety of market changes around the world and that will be our approach on this issue as well. “

 

On the other hand, the Motor & Equipment Manufacturers Association (MEMA) signed a letter warning the Trump Administration that steel tariffs would hurt the U.S. economy. The letter was also signed by 24 other trade associations including automotive, manufacturing and agriculture.

In a separate letter to the White House, Steve Handschuh, MEMA president and ceo outlined the impact of tariffs on the motor vehicle parts manufacturing industry.

In the separate letter, Handschuh referenced past MEMA comments in May and June of 2017 when the organization noted that disruptions to the steel and aluminum supply chain would not contribute to the national security of the U.S.

Instead, MEMA urged the administration to take a product and country specific approach to the tariff rather than issuing blanket quotas on all steel and aluminum tariffs.

 

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