Associations representing manufacturers of vehicles and parts have spoken out against President Donald Trump's plan to place a 25% tariff on steel and a 10% tariff on aluminum imports.
Both metals are crucial to the production of cars and trucks sold in America today and could raise the sale prices of those vehicles substantially.
In addition to paying more for their vehicles, American consumers and workers can also expect to bear the brunt of the retaliatory tariffs other countries will almost certainly place on goods manufactured and exported from the U.S., said Cody Lusk, president and chief executive of the American International Automobile Dealers Association (AIADA).
"These proposed tariffs on steel and aluminum imports couldn’t come at a worse time," Lusk said. "Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America. The burden of these tariffs, as always, will be passed on to the American consumer. Car shoppers looking for a deal will instead find that they are paying a new tax to transport themselves and their families."
The Motor & Equipment Manufacturers Association (MEMA) also expressed opposition to the plan. MEMA represents more than 1,000 companies that manufacture vehicle parts and components.
"The tariffs announced on March 1 will be detrimental to the motor vehicle parts supplier industry and the 871,000 U.S. jobs it directly creates," said Steve Handschuh, MEMA's president and CEO. "We have voiced repeatedly that while we support the administration's focus on strong domestic steel and aluminum markets, tariffs limit access to necessary specialty products, raise the cost of motor vehicles to consumers, and impair the industry's ability to compete in the global marketplace. This is not a step in the right direction."
Steel and aluminum tariffs could directly counteract any benefits American manufacturers have seen from tax and regulatory reform. An analysis of tariffs on steel imposed in 2002 found that the Bush steel tariffs cost 200,000 jobs, including 30,000 in Michigan, Ohio and Pennsylvania alone, Lusk added.
Commercial Vehicle Industry Responds
Engine manufacturer Cummins was reserved in its response to the proposed tariffs in a statement saying, "We won’t know the full impact until the final rule is issued." The company referred to statements that it had previously made independently and in conjuction with the organization Business Roundtable, where the company voiced its concerns that such actions will hurt American businesses, workers and consumers.
The Business Roundtable is a politically conservative association of chief executive officers who lead U.S. companies and the organization came out in opposition to the President’s plan.
“It will hurt the U.S. economy and American companies, workers and consumers by raising prices and resulting in foreign retaliation against U.S. exporters,” Business Roundtable said in a statement about the proposed tariffs. “BRT shares the President’s goal of addressing global overcapacity of steel and aluminum. We urge the President to pursue other approaches that target unfair traders without putting various parts of the economy at such high risk, such as strongly enforcing U.S. unfair trade laws.”
Several commercial vehicle manufacturers declined to comment at this time, but a Navistar representative affirmed the company’s support for free trade and global supply chains and cautioned against tariffs that could impact U.S. manufacturer cost competitiveness and quality.
“If these tariffs are enacted, there’d be a significant impact to the commodities that are key components of commercial vehicles, making them more expensive for us to make, and ultimately, for our customers to purchase. Until seeing the final executive order, we’re not going to speculate further on the impact of this tariff," the company stated.