MEMA Speaks Up on Tariffs During Testimony Before USTR

Date: May 16, 2018

MEMA testified on behalf of its division members today on the Section 301 proposed China tariffs as part of a 3-day public hearing before the United States Trade Representative (USTR) in Washington, D.C. USTR has proposed a 25 percent tariff on a wide variety of products imported from China, including certain motor parts and equipment as part of the Section 301 action to remedy intellectual property (IP) theft.

“Vehicle suppliers operate in a global supply chain of domestic and international suppliers and customers,” said Ann Wilson, MEMA Senior Vice President of Government Affairs during the testimony.  “China is a large and important trading partner for our industry; many U.S. motor vehicle suppliers have manufacturing facilities in China to service Asia and the rest of the world. Domestic capacity is simply not available for some of the materials and parts from China relied on by suppliers. These parts are necessary to enable domestic vehicle suppliers to continue their U.S.-based operations. The proposed tariffs on the listed products relied on by suppliers will cause disproportionate harm to U.S. interests by disrupting American manufacturing operations, and increasing costs, both to U.S. producers and consumers. The increased costs will place a significant harmful burden – particularly on small and medium businesses – including the possibility of forced bankruptcy and loss of income.”

“[T]he cost of these tariffs won’t just impact companies, but ultimately U.S. consumers and our country. The price will be loss of current jobs, constrained access to materials and parts, and curtailed future U.S. investments by vehicle suppliers.” Wilson said. “We urge you to not move forward with broad-based tariffs as outlined in MEMA’s written submission to USTR. Additionally, MEMA recommends bilateral discussions between the U.S. and China before implementing any tariffs that will harm our industry, job creation, domestic investments, and the overall U.S. economy.”

In addition to the oral testimony, MEMA has submitted written comments on the issue. MEMA submitted its comments to USTR in response to the  Notice of Proposed Determination and Request for Comments issued last month regarding actions related to trade practices of China. The comments ask USTR to remove certain motor vehicle materials and parts imported from China from the proposed list of tariffs. MEMA included an aggregated, non-exhaustive list of products included in the USTR’s proposal that should be excluded. The primary reasons are these products used in the motor vehicle supplier industry either as part of the manufacturing production line or as materials needed to manufacture components. You can view the full comments here.

This is just one of many leadership initiatives MEMA has taken recently on important trade issues, including Section 301, Section 232 steel and aluminum tariffs, and the North American Free Trade Agreement (NAFTA) renegotiations. From testifying before the House Ways and Means Committee to submitting detailed comments and responses and meeting directly with the Trump administration, MEMA has been the prominent voice and face of the motor vehicle parts supplier industry in Washington, DC.

For more details visit the MEMA Trade Resources Page.

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