SEMA eNews Vol. 21, No. 25, June 21, 2018

SEMA Warns Current Tariffs Are a Tax on American Companies and Consumers

By SEMA Washington, D.C., Staff

SEMA cautioned President Trump and the U.S. Congress that tariffs imposed by the U.S. government are harming American companies, workers and consumers. SEMA-member companies are now grappling with higher-priced steel and aluminum because of global tariffs. The U.S. government has also initiated questionable tariffs on Chinese products, and retaliatory tariffs levied by China and many American allies are in the works. Beyond that, the U.S. government is now threatening tariffs of up to 25% on imported automobiles and auto parts.

“The United States has helped create a global free-trade system, which includes mechanisms for addressing unfair trade practices,” said SEMA President and CEO Christopher J. Kersting. “SEMA cautions the president and lawmakers to work with our trading partners and employ U.S. law judiciously. The current tariffs are a tax on American companies and consumers that are causing unnecessary harm.” 

President Trump has directed the U.S. Department of Commerce to investigate whether imported automobiles and auto parts pose a threat to America’s national security. While the premise of the investigation has not been clearly communicated, imposing tariffs would have damaging consequences for the industry and automotive enthusiasts.

SEMA-member companies employ more than one million Americans who produce, sell and install specialty auto parts on every type of automobile built in the United States and overseas. Products range from custom wheels to turbochargers, lighting equipment, exhaust systems, suspensions, truck caps, mobile electronics and other parts that enhance a vehicle’s appearance and performance. The supply chain for these parts is global, integrated and complex. Beyond domestic sales, SEMA-member companies have a robust export market.

SEMA members have seen steep price hikes for steel and aluminum, and are now having to make tough decisions about passing those costs along to the consumer. Marketplace confusion with respect to country exemptions and company exclusions remains unresolved. A new set of tariffs is now being imposed on Chinese products, but it is unclear how they will address intellectual property threats and free-market access. 

“SEMA welcomes efforts by the U.S. government to protect American companies and their customers from unfair trading practices,” said Kersting. “We urge the President and Congress to pursue trade infringements in a fashion that does not inflict unintended economic harm.

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