WASHINGTON — Both domestic and international vehicle industry trade associations are among dozens of trade groups that are warning the Trump administration that tariffs on autos and auto parts would only harm the U.S. automotive industry.
The Auto Care Association (ACA), Motor & Equipment Manufacturers Association (MEMA) and European Tyre & Rubber Manufacturers' Association (ETRMA) are among more than 2,200 parties that submitted comments to the U.S. Department of Commerce regarding the Trump administration's proposed imposition of tariffs on autos, trucks and vehicle parts under Section 232 of the Trade Expansion Act of 1962.
U.S. Commerce Secretary Wilbur Ross announced the Section 232 investigation against imported autos and auto parts on May 23, saying at that time, "There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry."
Under Section 232, the government may levy tariffs against imported goods it deems as potential national security risks.
However, the three associations argued the opposite in their comments dated June 29, the deadline for comments on the investigation.
"Countries have become more efficient and productive when specializing in certain tasks, resulting in parts and components to cross borders multiple times before final assembly," Aaron Lowe, ACA senior vice president, regulatory and government affairs, wrote.
"Even American-made automobiles contain a significant number of foreign-produced parts," he added. "Additionally, a number of auto parts and components cannot be sourced in the U.S., as there are no U.S.-based factories producing some of these products, and would be extremely cost-prohibitive if manufactured in the U.S."
In its comments, the ACA included the results of an economic study it commissioned from John Dunham and Associates, which estimated that 25-percent tariffs on imported auto parts would cause a reduction of 17,800 jobs in domestic auto parts manufacturing, 6,800 jobs in vehicle repair shops and 85,200 jobs in the auto care wholesale and retail segment.
MEMA emphasized the interconnectedness of the auto and auto parts industries. Ann Wilson, MEMA senior vice president of government affairs, noted that General Motors Co. and Ford Motor Co. alone share 76 percent of their suppliers.
"Disruption to one implies disruption to all," Ms. Wilson wrote. "As suppliers and OEMs develop new technologies and vehicles, this interconnectedness is critical to the long-term viability of the industry — not only for new car production, but also the aftermarket production of the components need to maintain vehicles."
Ms. Wilson urged the administration not to include motor vehicle parts in its actions involving tariffs and quotas.
"These parts are not only needed to produce new OE parts, but also aftermarket parts for repair and maintenance, which are necessary for the continued safe and efficient operation of all vehicles — including U.S. military vehicles," she wrote.
ETRMA Secretary General Fazilet Cinaralp noted that it is still unclear whether tires will be included in any Section 232 actions on auto parts. In any case, she wrote, they should not be, at least not tires bearing a European brand.
"EU-based (tire) companies positively contribute to the U.S. economy," she wrote. Those companies operate 21 plants and three research centers in the U.S., employing 21,000 and investing more than $1 billion annually in the U.S.
"As such, EU-based companies are keen to contribute to the success of the American economy, of which they have been part for nearly half a century," Ms. Cinaralp wrote. "As a result, the European tire industry requests excluding tires from the scope of this investigation."
According to the White House, under the terms of the Section 232 investigation, the Commerce Department is required to issue a report on its investigation findings within 270 days of initiating an investigation — which in this case would be mid-February 2019 at the latest.
Then the president has 90 days to determine whether he concurs with the findings and, if so, to use his statutory authority under Section 232 "to adjust the imports" as necessary, including through tariffs or quotas.
The Section 232 investigation is separate from the current round of tariffs and counter-tariffs the U.S. and China are engaging in.