MEMA weighed in on behalf of motor vehicle suppliers urging that tariffs not be placed on copper alloy products as retaliation against the EU’s failure to revoke subsidies deemed illegal by the World Trade Organization. The U.S. brought a WTO case against the EU in 2004 against Airbus Industry subsidies in a now long-running large civil aircraft dispute.
In a letter on Aug 5 to U.S. Trade Representative Robert Lighthizer, MEMA argued that the inclusion of ten tariff lines of copper alloy products on a list of a $4 billion potential retaliation list against the EU would be problematic for the vehicle supplier sector.
The U.S. government requested the authority from the World Trade Organization to retaliate against the EU for not fully ending subsidies of large civil aircraft with countermeasures worth $11.2 billion per year. The U.S. initially requested potential 100 percent tariff retaliation on $21 billion in products imported from the EU on April 12. The April and July lists combined is about $25 billion in imports subject to potential tariff retaliation.
“That gives the room to withdraw many currently listed items from retaliation consideration and MEMA urges that all ten tariff lines of copper alloy products be withdrawn,” the letter said. “These critical tariff lines should be withdrawn because U.S. alternatives are not being manufactured to the standards necessary for public safety, not available in necessary quantities or not available at all.”
The materials affected by the tariffs are made into components that vehicles manufacturers use during the final motor vehicle assembly process. MEMA warns that the implementation of more tariffs could encourage production to shift overseas, and in turn, shift where jobs are located, impacting smaller businesses most directly.
“Larger Tier 1 suppliers might be able to absorb the impact of these tariffs to a degree,” MEMA wrote. “However, small- and medium-sized Tier 2 and Tier 3 suppliers are particularly susceptible to increased costs, squeezed margins, and added burdens.”
MEMA concluded that motor vehicle industry could face uncertainty if these tariffs are imposed.
“That uncertainty, coupled with increased costs and constrained access, could push away research and development and production of new technologies in the copper alloy product sector from the U.S. to our competitors. Vital high wage manufacturing jobs could be lost, as well as an important industrial base.”