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Motor Vehicle Parts Suppliers Reiterate Warning Against Tariffs on Steel and Aluminum

Date: February 16, 2018

Washington, D.C. – February 16, 2018 -- In the wake of newly released reports from the U.S. Department of Commerce, the Motor & Equipment Manufacturers Association has reiterated its warning against imposing tariffs or quotas on imported steel and aluminum.

Commerce Secretary Wilbur Ross has recommended steel imports be subjected to a 24 percent global tariff or an even higher tariff – 53 percent – from 12 countries, including Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam. He has also suggested a quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

“While we support the administration’s focus on strong domestic steel and aluminum markets, tariffs of this magnitude would be detrimental to the motor vehicle parts supplier industry and the jobs its creates in the United States. It would reduce employment and increase costs to the consumer,” MEMA President and CEO Steve Handschuh said today. “Such costly remedies would impair the industry’s ability to compete in the global marketplace. Access to these specialized products is critical to motor vehicle parts suppliers and our national economy.”

MEMA has strongly argued that tariffs on steel and aluminum would hurt the largest sector of manufacturing jobs in the U.S., putting American jobs -- and the nation’s economic security -- at risk. Motor vehicle suppliers, which directly employ more than 871,000 Americans, currently anticipate continued job growth 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. Putting American jobs at risk runs counter to the Trump administration’s efforts to bring jobs back to the U.S.

Many specialty materials and components imported by motor vehicle suppliers are used by hundreds of vehicle parts manufacturers.  Suppliers’ access to these specialized products is critical to the industry and our national economy,” Handschuh said in a letter this week to President Donald J. Trump. “MEMA member companies operate in an integrated global supply chain with both suppliers and customers inside and outside of the United States. This model has allowed for continued growth in motor vehicle production as well as U.S. employment in our sector… [D]isruptions to supply chains or increases in production costs will not contribute to the national security of the United States.”

Secretary Ross also recommends an appeal process by which affected U.S. parties could seek an exclusion from the tariff or quota imposed. The Secretary would grant exclusions based on a demonstrated: (1) lack of sufficient U.S. production capacity of comparable products; or (2) specific national security-based considerations. This appeal process would include a public comment period on each exclusion request, and in general, would be completed within 90 days of a completed application being filed with the Secretary.

“If a tariff determination is made, these products should be excluded prior to the tariff going into effect. If that is not the case, we urge the President to consider the impact any exception process will have on the hundreds of suppliers dependent on steel and aluminum imports.  Individual companies should not be burdened with the requirement to separately apply for exemptions or exclusion for these specialty products,” Handschuh said.

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