Jamell Harris will load raw casting heads produced at Stellantis Dundee Engine Complex in Dundee, Michigan on August 18, 2022.
Bill Pugliano | Getty Images
Detroit – Six of the top policy groups representing the US automotive industry are not joining forces to lobby the Trump administration against a 25% tariff on auto parts, due to take effect by May 3.
A group representing franchise dealers, suppliers and almost all major automakers, wrote in a letter to Trump administration officials that future taxes could put US automobile production at risk. The letter points out that many automotive suppliers are already “suffering” and cannot afford additional costs, leading to problems with the wider industry.
“Most auto suppliers are not capitalized due to sudden tariff-induced disruptions. Many are already suffering and face production halts, layoffs and bankruptcies,” the letter reads. “One supplier will only fail to lead to the closing of the automaker’s production line. When this happens, all suppliers will be affected, as was done during the pandemic, and workers will lose their jobs.”
The letter dated April 21st is addressed to U.S. Treasury Secretary Scott Bescent, U.S. Department of Commerce Secretary Howard Rutnick, and U.S. Trade Representative Jamie Songriers.
It is signed by the heads of the Alliance for Automotive Innovation, the American International Automobile Dealers Association, Autos Drive America, Vehicle Suppliers Association MEMA, the National Automobile Dealers Association, and the American Automotive Policy Council.
The co-writing is not distinctive, if not unprecedented in the automotive industry. Such organizations rarely sign on to a single joint message.
The group says it represents the country’s number one manufacturing sector that supports 10 million American jobs in all 50 states and puts $1,000 trillion into an economy that costs $1.2 trillion each year.
Automakers not represented by the group include electric car makers Tesla, Libian Automotive and Meid Group.
“President Trump has shown openness to reconsidering the administration’s 25% tariffs on imported auto parts. It’s a positive development and a welcome relief, as well as the tariff relief that has been approved for appliances and semiconductors recently.”
The letter comes a week after President Donald Trump said he would “help” some auto companies that need more time to move or increase our vehicle production.
“We’re looking for something to help some of the car companies that are switching to parts made in Canada, Mexico and elsewhere. They need a bit of time to make it here,” Trump said on April 14.
Automotive executives and experts say CNBC Trump’s tariffs are even more disastrous for car suppliers than for car manufacturers themselves. The impact, they say, can cause ripple effects through the global supply chain.
According to a research report from Wall Street and Automobile Analysts, automotive staff expect millions of units, higher new and used car prices, and lower vehicle sales amounting to an increase in costs of over $100 million.
“We support more manufacturing and additional supply chains through the US, but we cannot re-rout the global supply chain overnight or months. This will take time,” reads the letter.
