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Major auto groups make united plea for tariff relief from Trump

Grant Schwab, The Detroit News on

Published in Business News

WASHINGTON — Industry trade groups representing automakers, dealers and suppliers sent a joint letter Monday to top Trump administration officials urging relief from tariffs on auto parts set to take effect next month.

"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," the letter said.

Six of the auto industry's biggest lobbying groups signed onto the letter, presenting a rare unified front against 25% import taxes set for May 3 on more than 100 categories of auto parts ranging from engines to steering wheels to hinges and more. The organizations warned of supply chain failures and job losses that would trigger COVID-style disruptions to the U.S. auto industry and states like Michigan that rely on it as an economic driver.

"Most auto suppliers are not capitalized for an abrupt tariff induced disruption. Many are already in distress and will face production stoppages, layoffs and bankruptcy," the letter added. "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."

The six signatories of the letter include the heads of:

—The Alliance for Automotive Innovation, which represents every major automaker in the United States except Tesla Inc.

—American Automotive Policy Council, which specifically represents the interests of Detroit Three automakers Ford Motor Co., General Motors Co. and Stellantis NV

—Autos Drive America, which represents the interests of foreign brands with U.S. operations like Toyota Motor Co., Honda Motor Co. and others

—Motor & Equipment Manufacturers Association, the leading auto supplier lobbying group

—National Automobile Dealers Association

 

—American International Automobile Dealers Association

The groups sent their message to the Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer.

President Donald Trump has insisted that tariffs on imported vehicles and auto parts would coerce auto businesses to rebuild their U.S. manufacturing presence after decades of offshoring.

He featured unionized auto workers at his April 2 "Liberation Day" unveiling of other global tariffs, telling the crowd that "foreign cheaters have ransacked our factories and foreign scavengers have torn apart our once beautiful American dream."

But automakers and trade groups have repeatedly warned about the severe impacts tariffs will have on their business. Alliance for Automotive Innovation President and CEO John Bozzella made such a warning on March 28, two days after Trump first announced new auto tariffs.

“Additional tariffs will increase costs on American consumers, lower the total number of vehicles sold inside the U.S. and reduce U.S. auto exports— all before any new manufacturing or jobs are created in this country,” he wrote.

Components compliant with the U.S.-Mexico-Canada free trade agreement will initially be excluded from the 25% tariff while the federal government develops a system for determining U.S. content of parts that flow from the neighboring countries.

The industry letter is available in full here.


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