MEMA Takes Anti-Tariff Message to United States Trade Representative

MEMA testified today on behalf of its division members before the United States Trade Representative (USTR) regarding concerns over tariffs on $16 billion worth of products imported from China. The trade action taken by the Trump administration, known as the Section 301 tariffs, imposed 25 percent tariffs on $34 billion worth of Chinese imports on July 6, as a remedy to intellectual property (IP) theft and technology transfer. In addition, the administration has announced two more potential rounds of tariffs, 25 percent on an additional list worth $16 billion and 10 percent on a list worth $200 billion.

“Suppliers operate in a global supply chain of domestic and international suppliers and customers,” said Catherine Boland, MEMA vice president of legislative affairs in her testimony. “China is a large and important trading partner for our industry, with many U.S. motor vehicle suppliers maintaining manufacturing facilities in China to service Asia and the rest of the world. Domestic capacity is simply not available for some of the necessary materials and parts from China relied on by suppliers.”

“The proposed tariffs on the listed products will cause disproportionate harm to U.S. interests by disrupting American manufacturing operations and increasing costs to both U.S. producers and consumers. The increased costs will create a significant harmful burden – particularly on small and medium businesses – including the possibility of forced bankruptcy and loss of income,” Boland said.

MEMA opposes using tariffs to curb IP theft and believes that the current, continued, and expected retaliatory tariffs could negate the Trump administration’s recent successful work on behalf of American companies, such as tax reform. The protection of intellectual property is a critical issue for MEMA and its members, and for decades MEMA has advocated for strong global protections of IP investments. However, MEMA fears that escalating this back-and-forth with a major trade partner will not resolve the issue at hand: IP protection is critical to the sustained success of the motor vehicle parts manufacturing industry, the largest sector of manufacturing jobs in the United States.

Instead, MEMA supports stronger bi-lateral engagement where China and the U.S. work together to protect the valuable IP of our members or leveraging the powerful relationships the U.S. has with other trading partners to pressure China to enforce their own IP laws and comply with international IP laws and regulations. MEMA also testified before USTR in May against these tariffs.  For more information on MEMA’s Section 301 activities, please visit MEMA’s Trade Resources Page.