Auto Industry Joins Forces to Oppose Tariffs on Imported Automobiles and Auto Parts

By SEMA Washington, D.C., Staff

The Trump Administration is threatening to impose 20% to 25% tariffs on $200 billion worth of Chinese imports, rather than the 10% tariffs previously announced.

Eight major trade associations have formed the Driving American Jobs Coalition to oppose potential tariffs on imported motor vehicles and auto parts. The group includes SEMA and represents the broad scope of the auto industry, from automakers and dealers to parts manufacturers, distributors, retailers and service providers. The Coalition is seeking to convince the Trump Administration not to impose tariffs.

In May, the U.S. Department of Commerce (DOC) began an investigation on whether imported automobiles and auto parts posed a national security threat. The investigation applies to all types of cars and parts, including new cars, classic cars, OEM parts and specialty auto parts. The DOC will issue its findings and recommendations for presidential actions, if any, as early as September. President Trump has stated that he is considering global tariffs of 20% to 25%.

At a DOC hearing in July, SEMA joined with the other trade associations in opposing the tariffs. View a copy of SEMA’s written comments.  

The Driving American Jobs Coalition issued the following press release: 

Driving American Jobs Coalition Launches Campaign to Oppose Section 232 Auto Tariffs

August 20, 2018, Washington, D.C.—The Driving American Jobs Coalition, a group representing the United States’ leading auto manufacturers, parts suppliers, auto dealers, parts distributors, retailers and vehicle service providers, announced today the formation of a new coalition to oppose potential new tariffs on imported automobiles and motor-vehicle parts.

The coalition will inform policymakers and stakeholders on the negative effects of imposing new auto tariffs, including massive job losses and significant consumer price increases for virtually all motor vehicles and parts, whether domestic or imported. Higher auto tariffs will also result in less capital for investments in innovation and less competition in promoting cutting-edge automotive technologies developed here at home.

At a time of unprecedented growth, new tariffs on imported vehicles and parts represent a significant threat to our economy and the tremendous job growth that has occurred since the president took office.

That is why American Automotive Policy Council, Auto Care Association, American International Automobile Dealers Association, Alliance of Automobile Manufacturers, Association of Global Automakers, Motor & Equipment Manufacturers Association, National Automobile Dealers Association and Specialty Equipment Market Association have joined this unprecedented, industry-wide effort through Driving American Jobs. The group replaces a prior coalition of the same name formed to address other trade issues.

“The advancements our companies have made in investments, sales, production, exports and employment could be severely undermined by any increase in tariffs on passenger cars, light trucks and automotive parts,” said Governor Matt Blunt, president of the American Automotive Policy Council. “Our three companies alone—with their 250,000 U.S. workers in 226 plants, facilities, labs and distribution centers—produced 5.9 million vehicles in the U.S. last year and exported nearly 1 million of them. The impact of these proposed tariffs are especially harmful to American jobs because they would hurt U.S. employment across the supply chain.”

“Tariffs are particularly harmful to the auto industry because they will result in job losses that will be felt across the entire supply chain,” said Bill Hanvey, president and CEO of the Auto Care Association. “From the manufacturing facility in South Carolina to the dealership in Michigan to the independent repair shop in Pennsylvania, prices for vehicles, parts and repairs would go up, hurting consumers, and American jobs would disappear. We are glad to be lending our voice to this coalition and calling for the administration to protect American workers and the American auto industry.”

“All of the groups participating in this coalition understand the administration’s desire to level the playing field and make better trade deals for American workers and families,” said Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers. “But, we also agree that raising auto tariffs is the wrong approach to achieving these goals. Higher tariffs will significantly raise the price of all new cars and trigger a drop in sales and production—ultimately resulting in job losses. There is a much better way to accomplish our shared objectives. We look forward to working with the president and other policymakers.”

“Under these proposed tariffs, autos of all brands would go up in price by as much as $6,900—a cost that would hit not only consumers, but also the auto dealers and dealership employees who sell and service the vehicles,” said American International Automobile Dealers Association President and CEO Cody Lusk. “The resulting loss in auto and auto parts sales, dealership employment and facility investment would be devastating for the communities that rely on these small businesses to drive their economies.”

“Tariffs are taxes, and we believe there is no national security justification for taxing vehicle and auto parts imports. The U.S. auto industry is thriving and more competitive now than ever before,” said John Bozzella, president and CEO of the Association of Global Automakers. “The auto industry plays a critical role in growing our economy and tariffs will hurt American workers and consumers by raising the price of every vehicle built and sold in the U.S.”

“The importation of motor vehicle parts is not a risk to our national security,” said Ann Wilson, senior vice president of government affairs, Motor & Equipment Manufacturers Association. “However, the imposition of tariffs is a risk to our economic security, jeopardizing supplier jobs and investments in the United States. To put it simply, if we lose the opportunity to develop and manufacture new technologies in the U.S., we will have little opportunity to recoup these losses for a decade.”

“The proposed tariffs are an unwelcome tax on every sector of the auto industry,” said Christopher J. Kersting, president and CEO of the Specialty Equipment Market Association. “From the automakers to the many small businesses that comprise the specialty auto parts industry, tariffs on imported vehicles and auto parts pose an unexpected threat to a healthy American economy.”

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