WASHINGTON—Following President Trump's imposition of 25-percent tariffs on all steel and aluminum coming into the U.S., MEMA, the Vehicle Suppliers Association, warned of the "significant" negative impacts on auto suppliers and the industry overall.
"While MEMA supports efforts to strengthen domestic manufacturing, the changes to the Section 232 steel and aluminum tariffs will impose significant cost pressures and supply chain challenges that may affect the industry's long-term competitiveness," the association said in a statement. "MEMA is concerned that ending supply agreements with allied nations and the immediate sunset of the exclusion process will hinder the industry's ability to secure essential materials. This raises further concerns for vehicle suppliers relying on North American trade integration for cost stability and supply chain efficiency."
To support its view, the association pointed to a recent survey of its members, in which 139 suppliers participated. It indicated that 78 percent of suppliers are exposed to steel tariffs, while 68 percent are exposed to the aluminum tariffs.
Moreover, 80 percent are likely to be impacted by the derivative tariffs.
And the impacts of the tariffs have survey respondents worried, particularly for smaller suppliers. In all, 97 percent of MEMA survey respondents expressed concern about increased distress among sub-tier suppliers.
Further, transitioning supply chains is far easier said than done. Seventy-eight percent of suppliers said they don't have excess available capacity in the U.S. to domestically manufacture parts sourced through global supply chains.
Ultimately, MEMA said, the tariffs undermine the North American auto industry's competitive edge. And for this reason, the association said it will continue to advocate for its industry and members.
"As an industry, we recognize the importance of strong domestic supply chains," MEMA President and CEO Bill Long said in a statement. "At the same time, it is essential that trade policies allow suppliers to remain competitive in a global market. We continue to engage with policymakers to ensure these considerations are part of the broader discussion on economic growth and job creation."
