MEMA Responds to Trump Administration Extension of Tariff Exemptions

Date: May 1, 2018

The Motor & Equipment Manufacturers Association (MEMA) is pleased that the Trump administration has extended the exemption from steel and aluminum tariffs on the European Union, Canada, and Mexico for an additional 30 days. Further, the indication that agreements in principle have been reached with Australia, Argentina and Brazil is welcome news to the industry. We sincerely hope that this signals a willingness to consider the implications of broadly applied Sec. 232 steel and aluminum tariffs triggered by the administration in March.

Earlier this year, MEMA’s letter to President Donald J. Trump reiterated its support for the administration’s agenda to assure free, fair, and reciprocal trade and a level playing field for all Americans. Moreover, MEMA supports the administration’s efforts to strengthen our nation’s economy. Vis-à-vis the Section 232 decisions on steel and aluminum, national security also depends on the economic security of the country. However, in a global business environment, motor vehicle component manufacturers, which directly employ more than 871,000 Americans, require that these tariffs not be imposed in order to ensure economic certainty. In addition, we are concerned about other countries, such as Japan and Switzerland, that are not included in these exemptions.

Many specialty steel and aluminum materials imported by motor vehicle suppliers are used by hundreds of vehicle parts manufacturers operating in an integrated, complex global supply chain. Suppliers’ access to these specialized products – which are often only available by one or two sources in the world – is critical to the industry and our national economy.

Uncertainly for our members puts businesses – and jobs—at risk. If a company is importing steel or aluminum from non-exempted countries, they are paying a tariff now, even if they have filed for an exclusion. That means potential tariffs tie up millions of dollars that a business would rather invest in U.S. facilities and people. American businesses need a clear and predictable business environment to thrive in a global marketplace.

MEMA urges the administration to take a variety of actions to alleviate the burden placed on manufacturers by these tariffs and the related exclusions process. Examples of steps to take include:

  • Providing relief to applicants who experience undue delays in the Department of Commerce review period retroactive to date of application submission (or when deemed complete);

  • Simplifying and streamlining the application process and reducing confusion by allowing exclusions covering ranges of certain dimensions with the same Harmonized Tariff Schedule code to be on the same application form;

  • Allowing trade associations to apply for exclusions on behalf of an industry; and,

  • Reviewing, on a regular basis, the impact of tariffs on the economy and downstream users and implementing a plan to sunset the tariffs if they prove to have a significant negative impact.

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