MEMA Warns that Changes in Import Rules for Steel Could Put U.S. National Security at Risk

Date: June 1, 2017

In comments submitted May 31 to the U.S. Department of Commerce, MEMA warned that policy changes that prevent or encumber motor vehicle parts suppliers’ ability to obtain certain types of steel could jeopardize production of critical products made for the U.S. defense industry and could destabilize a growing U.S. manufacturing job base.

“Our industry is closely related to the U.S. defense industry,” said MEMA President and CEO Steve Handschuh. “Not only do our member companies provide components and parts for vehicles that the defense industry buys, but technical and material innovations our companies make have resulted in safer, more effective vehicles for defense. We strongly urge the government not to make any adjustments to steel imports.”

“There is no doubt that disruption to our members’ U.S. manufacturing operations would be detrimental to the national security of the United States,” said MEMA Senior Vice President of Government Affairs Ann Wilson in the comments. “Adjustments to steel imports that impact the production of vehicles and equipment provided to the U.S. defense industry would directly and adversely impact the U.S. defense industry by limiting or eliminating the supply of such vehicles and equipment.”

Since the motor vehicle parts supplier industry relies heavily on an integrated supply chain, MEMA argues that changes to steel import rules could increase costs and make certain forms of steel manufactured only outside of the U.S. difficult to obtain. Proposed changes to steel import rules, or “adjustments,” could include quotas, tariffs, taxes, or other policies that impact steel imports. MEMA’s comments are in response to a Commerce Department national security investigation of steel imports.

In the written comments, MEMA also argues that changing steel import rules would hurt the largest sector of manufacturing jobs in the U.S., putting American jobs – and the nation’s economic security – at risk: “Our member companies currently anticipate continued job growth in our industry for workers such as engineers, technicians and skilled trades and, therefore, expect to contribute heavily to the economic security of the country. However, this growth assumes no adjustments to steel imports.”

Vehicle suppliers are the largest manufacturing sector in the United States directly employing over 871,000 Americans in all 50 states plus the District of Columbia. Together with indirect and employment-induced jobs, the total employment impact of the motor vehicle parts manufacturing industry is 4.26 million jobs. Nearly $435 billion in economic contribution to the U.S. GDP is generated by the motor vehicle parts manufacturers and its supported activity. In total, motor vehicle parts suppliers contribute more than 77 percent of the value in today’s vehicles. 

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