Trade Cases

Auto Coalition Opposes Potential Tariffs

August 21, 2018

A group representing the United States’ leading auto manufacturers, parts suppliers, auto dealers, parts distributors, retailers and vehicle service providers have formed the Driving American Jobs Coalition to oppose potential new Trump administration tariffs on imports of autos and auto parts. The coalition argues that imposing new auto tariffs will cause “massive job losses and significant consumer price increases for virtually all motor vehicles and parts, whether domestic or imported.” The proposed Section 232 tariffs would also lead to less investment in innovation and less competition to develop cutting-edge automotive technologies, the group says.

Comprised of the American Automotive Policy Council, the Auto Care Association, the American International Automobile Dealers Association, the Alliance of Automobile Manufacturers, the Association of Global Automakers, the Motor & Equipment Manufacturers Association, the National Automobile Dealers Association and the Specialty Equipment Market Association, the coalition replaces one formed previously to address other trade issues.

“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,” said the group in an Aug. 20 press release.

“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, which represents Ford, FCA and GM. “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.”

The coalition stressed that the auto sector does not support the proposed tariffs. “Tariffs are taxes and we believe there is no national security justification for taxing vehicle and auto parts imports.” said John Bozzella, President and CEO of the Association of Global Automakers. “The U.S. auto industry is thriving and more competitive now than ever before. 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 American International Automobile Dealers Association estimates that all vehicle brands would increase in price by as much as $6,990, hitting consumers, dealerships and employees who sell and service autos.

“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.”

“I’ve been in the industry for over 20 years, and I’ve never seen this level of unity of purpose or level of concern,” said Bozzella, adding that the industry is “united in their significant concern for the impact of high auto tariffs on workers and on customers.”

Commerce Secretary Wilbur Ross had hoped to deliver a report on the investigation to the president by the end of the month. Ross said on Monday the report may be delayed due to complications from NAFTA and European Union trade talks, as well as by the extensive material forwarded by the auto industry to Commerce for consideration.

“We just received elaborate questionnaires from the car companies, with zillions of pages, and that won’t be ready in five minutes,” said Ross. “We’re running out of August.”