MEMA Applauds Decision to Proceed Without BAT on Tax Reform

Date: July 27, 2017

MEMA supports and appreciates the joint statement today by the White House and Congressional leaders that tax reform will proceed without a Border Adjustment Tax (BAT).

MEMA released a study last week, which examined the real-world implications of a border tax —how it would impact new-vehicle and supplier costs, new-car features and prices, consumer purchases, jobs, and trade. The study, commissioned MEMA and conducted independently by the Boston Consulting Group (BCG), found that with a 15% BAT, U.S. automakers (OEMs) and suppliers would pay $34 billion in import taxes annually while realizing only $12 billion in export benefits, costing U.S. automakers and suppliers $22 billion a year, net. This translates into an average $1,000 increase in per-vehicle manufacturing costs at the top 12 OEMs selling cars in the U.S.; a 20% BAT would add an average of $1,800 to per-vehicle production costs.

Suppliers will continue working with Congress and the administration to simplify the tax code and reduce rates in order to strengthen our global manufacturing competitiveness, which is needed for growth and investments here in the United States.

About the Motor & Equipment Manufacturers Association

The Motor & Equipment Manufacturers Association (MEMA) and its four specialized divisions comprise a leading international trade association in the fast-changing mobility industry. Representing vehicle suppliers that manufacture and remanufacture components, technologies, and systems for use in passenger cars and heavy trucks, MEMA serves as a critical bridge between high-tech capabilities in new vehicles—such as autonomous vehicles and vehicle connectivity—and the “nuts and bolts” of vehicle manufacturing. MEMA works at state, federal, and international levels to ensure that the marketplace and public policy support the development of advanced, transformative technologies that enable safer, smarter, and more efficient vehicles. MEMA’s members are represented through four divisions: Automotive Aftermarket Suppliers Association (AASA), Heavy Duty Manufacturers Association (HDMA), Motor & Equipment Remanufacturers Association (MERA), and Original Equipment Suppliers Association (OESA). For more information on how MEMA is leading transformation in the mobility industry, visit www.mema.org.

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