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MEMA Urges New Trade Measures to Assist Motor Vehicle Parts Suppliers as Lighthizer Testifies on 2020 Trade Policy Agenda

Date: June 23, 2020

MEMA submitted identical comments on June 17 to both the House Ways and Means and Senate Finance Committees, providing an industry perspective on the impact of the U.S.’s current trade policy and making suggestions to improve the system for motor vehicle parts suppliers. That same day U.S. Trade Representative Robert Lighthizer testified before both committees to give details on the Trump administration’s trade policy for 2020.

MEMA expressed its gratitude to the committees, the Michigan delegation, and the bicameral Congressional leadership for assisting the motor vehicle parts industry while the coronavirus pandemic shakes the economy. 

“MEMA applauds the bipartisan actions of Congress and Trump Administration to address the national health and economic crisis brought on by the COVID-19 global pandemic. While we deeply appreciate the nearly $3 trillion in relief for the national economic rapidly passed on a bipartisan basis, many motor vehicle parts manufacturers are still struggling. Recently, almost 20 percent of our members reported a severe liquidity crisis that could lead to bankruptcy in the next eight weeks. These manufacturers are primarily mid-size suppliers. If their operations close or slow production, the entire supply base is jeopardized,” the letters said.

In the letter, MEMA highlighted that member companies and their employees were able to quickly adapt operations to manufacture personal protective equipment (PPE) needed to combat the coronavirus pandemic, but added that, “MEMA members need additional COVID-19 assistance now to assure the viability of our sector.”

MEMA suggested several changes that would help restore growth to both the industry and to manufacturing as a whole. These include avoiding the implementation of new tariffs and permanently phasing out existing tariffs against the U.S.’s trading allies; negotiating North American Cybersecurity and Infrastructure Security Agency (CISA) standards for the U.S., Canada, and Mexico; building on the success of the U.S.-China Phase One Agreement to re-orientate China to market-based policies; and reshoring U.S. manufacturing jobs by establishing new measures like a federal Automotive Component Technology (ACT) grant program.

Lighthizer, though acknowledging that China is behind in making its commitments to purchase the agreed quantity of agricultural and energy products, said he expects them to meet those requirements later in the year. Lighthizer promised to enforce the provisions of the United States-Mexico-Canada Agreement (USMCA) when it goes into effect July 1, stating that the U.S. anticipates issues that will likely need to be ironed out with Mexico on labor, biotechnology, intellectual property, and potentially energy provisions.

Tariffs remain a part of the administration’s trade policy. Lighthizer said the U.S. would not consider signing an international agreement to remove tariffs on personal protective equipment (PPE) and medical goods. He also expressed support for tariffs on imported semiconductor chips along with passing a bill to provide a refundable investment tax credit to encourage building chips in the U.S. Additionally, Lighthizer criticized the World Trade Organization on a series of issues, including rules that allow other countries to impose higher tariffs on the U.S. than the U.S. could impose on them.

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