Commentary: SC Needs a Fairer Trading System, but Tariffs Aren’t the Answer

Date: August 13, 2019

Editor’s Note: MEMA has vocally opposed a wide range of tariffs that impact the motor vehicle parts industry, and has worked with the South Carolina Automotive Council on this and other issues. For more information about MEMA’s trade positions, contact Catherine Boland.

The following op-ed was written by Amy Tinsley and published in the Post and Courier. You can read the original publication here.

South Carolina and the U.S. automotive industry depend on a global supply chain to provide raw materials and finished goods in order to compete across the world.

The U.S. automotive industry supports ten million American jobs, generates $500 billion in annual paychecks and $205 billion in tax revenues.

Here in South Carolina, the automotive industry has an annual economic impact of more than $27 billion and employs more than 72,000 people.

Make no mistake: The automotive industry has been good for the United States, South Carolina and our citizens. That said, the industry is facing a potential threat that will impact jobs, investment and the cost of vehicles. Whether you make, sell, or simply drive an automobile, no one will be unaffected by the potential impact of changes to the industry.

A year ago, the U.S. Department of Commerce initiated an investigation into whether the importation of automobiles and automotive parts poses a national security risk to the United States. Unlike many other controversial issues facing this country, only a handful of comments among thousands submitted supported these proposed tariffs. The entire industry — automobile manufacturers, dealers, suppliers and the aftermarket — agrees that the importation of automobiles and automotive parts does not pose a national security risk, and that these tariffs would have a significant negative economic impact on the U.S. economy and jobs.

On May 17, the Trump administration concluded that imports of automobiles and automotive parts do present a risk to national security. However, the administration also decided to seek negotiations with other countries and delay, potentially until November, any decision to impose tariffs on our industry.

As a state, and as an industry, we need the threat of these tariffs lifted. South Carolina has too much at stake. We cannot afford to hit the brakes on one of our most important industries.

There is no doubt that the imposition of these tariffs would increase consumer prices, reduce industry sales and decrease vehicle production — hurting manufacturing jobs. According to the Center for Automotive Research (CAR), 25 percent across-the-board automotive tariffs would increase the price for consumers of a typical motor vehicle by up to $4,400, eliminate 714,700 U.S. jobs and cut sales by two million units. (CAR, July 2018)

While the industry strongly supports the administration’s goal of a fair-trading system for all Americans, tariffs would increase consumer costs while limiting choice, weaken our domestic supply chain and decrease jobs and investment. We know there is a better way.

Amy Tinsley is the executive director of the South Carolina Automotive Council.

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