Jamell Harris loads raw casting heads to be manufactured at the Stellantis Dundee Engine Complex on August 18, 2022 in Dundee, Michigan.
Bill Pugliano | Getty Images
DETROIT – Six of the top policy groups representing the U.S. automotive industry are uncharacteristically joining forces to lobby the Trump administration against 25% tariffs on auto parts that are set to take effect by May 3.
The group – representing franchised dealers, suppliers and nearly all major automakers – say in a letter to Trump administration officials that the upcoming levies could jeopardize U.S. automotive production. The letter notes many auto suppliers are already “in distress” and wouldn’t be able to afford the additional cost increases, leading to broader industry problems.
“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 reads. “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 letter, dated April 21, is addressed to U.S. Treasury Secretary Scott Bessent, U.S. Department of Commerce Secretary Howard Lutnick and U.S. Trade Representative Ambassador Jamieson Greer.
It is signed by the heads of the Alliance for Automotive Innovation, American International Automobile Dealers Association, Autos Drive America, vehicle suppliers association MEMA, National Automobile Dealers Association, and American Automotive Policy Council.
The joint letter is uncharacteristic, if not unprecedented, for the automotive industry. Such organizations rarely, if ever, sign on to a single joint message.
The groups say they represent the country’s No. 1 manufacturing sector that supports 10 million American jobs in all 50 states and pumps $1.2 trillion into the economy every year.
Automakers not represented by the groups include electric vehicle makers Tesla, Rivian Automotive and Lucid Group.
“President Trump has indicated an openness to reconsidering the administration’s 25 percent tariffs on imported automotive parts – similar to the tariff relief recently approved for consumer electronics and semiconductors. That would be a positive development and welcome relief,” the letter reads.
The letter comes a week after President Donald Trump said he may “help” some auto companies that need more time to move or increase U.S. vehicle production.
“I’m looking for something to help some of the car companies, where they’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time because they’re going to make them here,” Trump said April 14. “But they need a little bit of time, so I’m talking about things like that.”
Auto executives and experts have told CNBC Trump’s tariffs are more dire for auto suppliers than the automakers themselves. The impact could cause a ripple effect through the global supply chain, they say.
Auto officials are expecting a drop in vehicle sales amounting to millions of units, higher new and used vehicle prices, and increased costs of more than $100 billion across the industry, according to research reports from Wall Street and automotive analysts.
“We support more manufacturing and additional supply chains that run through the United States, but it is not possible to reroute global supply chains overnight or even in months. This will take time,” reads the letter.
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