U.S. automakers and parts suppliers lobby against Trump's tariffs on steel & aluminium and potential auto imports

U.S. automakers and parts suppliers urged the Trump administration to end steel and aluminium tariffs on Mexico and Canada and warned against the potential U.S. national security tariffs on automotive imports on Thursday November 15. They said such tariffs would lead to widespread job losses.

They expressed disappointment at not lifting the tariffs before the signing of new USMCA, which would replace the North American Free Trade Agreement. Speaking at a public comment hearing , Jennifer Thomas, vice president of federal government affairs for the Alliance of Automobile Manufacturers said that the success of both the new USMCA and US auto sector continue to be undermined by these tariffs. She highlighted the rising production cost for all U.S. automakers that is threatening the industry’s competitiveness in the global market.

Thomas noted "several automakers have recently lowered their full-year earnings outlooks due to the increased costs of steel and aluminium." She urged the administration to eliminate the steel and aluminium tariffs prior to the signing of the USMCA.

She urged the new agreement to preserve the integrated regional automotive supply chain established throughout North America in order to maintain market stability and competitiveness in the global marketplace.

She expressed concern over the new agreement’s provision that increases the percentage of a car's parts that to come from the U.S., Canada or Mexico from 62.5 per cent to 75 per cent to qualify for duty-free treatment.

John Bozzella, CEO of the Association of Global Automakers that represents foreign-based manufacturers also said that he auto industry was expecting the tariffs to be lifted before the new agreement is signed.

"These tariffs are today raising costs for every automaker in the United States and, we believe, should be removed immediately," he said.

The Trump administration expressed the possibility of placing a 25 per cent tariff on imported vehicles, using Section 232, under the guise of protecting the country from a national security threat.  

"In our view, there is no credible justification for the idea that automotive imports threaten our national," he said.

USMCA also requires that 40-45 per cent of an auto's content be made by workers earning at least $16 per hour. It contains provisions to protect up to 2.6 million cars and $32.4 billion worth of parts imported from Canada and Mexico from 2.5 per cent tariffs on imported vehicles that are being considered separately by the Trump administration.