Michigan’s auto industry is bracing for potential tariffs on imported auto parts.
The U.S. Commerce Department delivered a report on Sunday to the White House on the national security implications of imported vehicle and auto parts. The “Section 232” national security report could potentially create the grounds for the president to impose a 25% tariff on imported vehicles and auto parts.
President Trump has 90 days to decide on whether to impose the tariffs.
Kristin Dziczek is Vice President of Industry, Labor & Economics at the Ann Arbor-based Center for Automotive Research.
She says imposing tariffs could have a big effect on the auto industry.
“We put out a study last week, assuming that Canada and Mexico would be exempt, and found the average price of a vehicle sold in the United States would go up about $2,750 and sales would drop about 1.3 million,” says Dziczek. She adds the impact would be greater if Canada and Mexico are not exempt.
Dziczek says even domestically produced vehicles rely heavily on auto parts from outside the U.S.
The auto industry is already lobbying hard against the possibility of tariffs.
Matt Blunt is the president of the American Automotive Policy Council. He says the auto sector plays a “pivotal role” in the U.S. economy, employing millions of Americans.
“We believe the imposition of higher import tariffs on automotive products under Section 232 and the likely retaliatory tariffs against U.S. auto exports would undermine – not help – the economic and employment contributions that FCA US, Ford and General Motors make to the U.S. economy,” says Blunt.