- Over half a dozen automotive industry lobbying groups just sent a joint letter to President Trump.
- In it, they warn that his 25 percent tariff on cars and parts from outside America could be harmful.
- They say it’ll lead to the loss of jobs and potentially bankruptcy for some companies.
On what Donald Trump called Liberation Day, he unveiled a sweeping 25 percent tariff on any car or part that isn’t made in America, regardless of its origin. This announcement sent ripples through the automotive industry, prompting a united front of lobbying groups to issue a stern warning in a letter addressed to the US administration.
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They argue that these tariffs could put jobs and companies at serious risk, with the potential for a pandemic-era impact still very much on the table, according to the groups.
More: The Most American-Made Cars Least Affected By Trump’s Tariffs
The letter was signed by a wide range of major industry organizations that represent nearly every automaker in the country such as General Motors, Toyota, Volkswagen, Hyundai and others.
“Tariffs on auto parts will scramble the global automotive supply chain and set off a domino effect that will lead to higher auto prices for consumers, lower sales at dealerships, and will make servicing and repairing vehicles both more expensive and less predictable,” the letter said.
“Most auto suppliers are not capitalized for an abrupt tariff induced disruption. Many are already in distress and will face production stoppages, layoffs and bankruptcy,” the letter, first reported by the Detroit Free Press, added. “It only takes the failure of one supplier to lead to a shutdown of an automaker’s production line. When this happens, as it did during the pandemic, all suppliers are impacted, and workers will lose their jobs.”
The coalition includes the National Automotive Dealers Association, the Alliance for Automotive Innovation, the Motor & Equipment Manufacturers Association, and more. Together, they represent every major automaker in the USA aside from Tesla, auto suppliers, and foreign automakers that have U.S.-based operations. Coming together like this is very unusual, says Carla Bailo, CEO of ECOS Consulting LLC and former president of the Center for Automotive Research.
“Normally, everyone sends out a separate note. The impact is just so profound for all of those industries, from the aftermarket all the way down to the OEs, there’s more power as a unit than doing it separately. There’s strength in numbers,” she told the Detroit News.
Read: Buick Was Killing It, Then Came Trump’s Tariffs
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The letter went to Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer. It’s unclear what, if anything Trump will do in response to the letter. He did say last week that he was “looking at something to help some of the car companies. They’re switching to parts that were made in Canada, Mexico, and other places, and they need a little bit of time, because they’re going to make them here,” he said.
If he doesn’t yield to this pressure, it’ll be interesting to see the result. Some automakers have already halted imports to the U.S. Others have openly said that they’ll hold off on price increases but only for a short time. Volvo has already laid off hundreds of workers with the tariffs in view, and prices on cars are increasing.
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