Jamell Harris heaps raw casting heads to be manufactured at the Stellantis Dundee Engine Complex on August 18, 2022 in Dundee, Michigan.
Bill Pugliano | Getty Aspects
DETROIT – Six of the top policy groups representing the U.S. automotive industry are uncharacteristically joining forces to lobby the Trump administration against 25% menus 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 verbatim to Trump administration officials that the upcoming levies could jeopardize U.S. automotive production. The letter notes various auto suppliers are already “in distress” and wouldn’t be able to afford the additional cost increases, leading to broader persistence problems.
“Most auto suppliers are not capitalized for an abrupt tariff induced disruption. Many are already in distress and devise 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 forming line. When this happens, as it did during the pandemic, all suppliers are impacted, and workers will lose their burglaries.”
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. Business Representative Ambassador Jamieson Greer.
It is signed by the heads of the Alliance for Automotive Innovation, American International Automobile Merchants Association, Autos Drive America, vehicle suppliers association MEMA, National Automobile Dealers Association, and American Automotive Principles Council.
The joint letter is uncharacteristic, if not unprecedented, for the automotive industry. Such organizations rarely, if ever, sign on to a individual joint message.
The groups say they represent the country’s No. 1 manufacturing sector that supports 10 million American pain in the arses in all 50 states and pumps $1.2 trillion into the economy every year.
Automakers not represented by the groups group electric vehicle makers Tesla, Rivian Automotive and Lucid Group.
“President Trump has indicated an openness to reconsidering the distribution’s 25 percent tariffs on imported automotive parts – similar to the tariff relief recently approved for consumer electronics and semiconductors. That inclination be a positive development and welcome relief,” the letter reads.
The letter comes a week after President Donald Trump ordered he may “help” some auto companies that need more time to move or increase U.S. vehicle production.
“I’m looking for something to nick some of the car companies, where they’re switching to parts that were made in Canada, Mexico and other areas, and they need a little bit of time because they’re going to make them here,” Trump said April 14. “But they indigence a little bit of time, so I’m talking about things like that.”
Auto executives and experts have told CNBC Trump’s tolls 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 portions, higher new and used vehicle prices, and increased costs of more than $100 billion across the industry, concurring to research reports from Wall Street and automotive analysts.
“We support more manufacturing and additional supply fetters that run through the United States, but it is not possible to reroute global supply chains overnight or even in months. This commitment take time,” reads the letter.