Leading automotive industry organizations have issued a warning to the Trump Administration that upcoming tariffs on auto parts will severely disrupt the sector, costing billions and threatening American jobs.
According to a Supply Chain Drive report, a joint letter to the Trump administration written by representatives from six major automotive groups stated that tariffs scheduled to begin May 3 would negatively impact an industry that supports 10 million U.S. jobs and contributes $1.2 trillion annually to the economy.
The letter, signed by the Alliance for Automotive Innovation, the American Automotive Policy Council, the American International Automobile Dealers Association, Autos Drive America, the Motor and Equipment Manufacturers Association, and the National Automobile Dealers Association, argues that while the USMCA has benefited the industry, additional tariffs would disrupt global supply chains essential to domestic production.
"Most auto suppliers are not capitalized for an abrupt tariff induced disruption," the letter says. "Many are already in distress and will face production stoppages, layoffs and bankruptcy."
The industry leaders warned that disruption to even one supplier could halt an automaker's entire production line. "When this happens, as it did during the pandemic, all suppliers are impacted, and workers will lose their jobs," the letter reads.
The groups acknowledged the administration's potential reconsideration of the 25% tariff on imported automotive parts, calling it "a positive development and welcome relief." However, they emphasized the severe consequences if the tariffs proceed as planned.
Automotive industry analysts note that tariff uncertainty has already prompted organizations like Cox Automotive to revise their annual domestic production forecasts downward. Some manufacturers are adjusting their strategies in response, including Nissan Motor Co., which reversed plans to reduce production at its Tennessee plant to maintain operations that avoid tariff exposure. Meanwhile, Canada has agreed to exempt certain USMCA-compliant vehicles assembled in the U.S. from its retaliatory 25% duties on American car imports.
