The Trump Administration yesterday announced the stay, though official confirmation of the pause has yet to be confirmed
Washington, D.C.—The Administration announced a pause yesterday on the 25% International Emergency Economic Powers Act (IEEPA) tariffs on automobile products from Canada and Mexico that comply with the U.S.-Mexico-Canada (USMCA) requirements, providing additional time for discussions on trade policy and supply chain impacts.
The Motor & Equipment Manufacturers Association (MEMA) told Aftermarket Matters Weekly on Wednesday that association representatives were meeting with the government officials at 4 p.m. to find out if the just-announced exemption of tariffs on U.S. automakers also applied to MEMA’s vehicle supplier community.
According to a late afternoon MEMA announcement, it looks as though its parts suppliers might have bought some time.
“Conversations held today indicate positive results that USMCA-compliant parts are included, but we are awaiting official confirmation from the Administration. Clarity on trade policy remains essential to ensuring supply chain stability and investment confidence,” said Bill Long, President and CEO of MEMA, The Vehicle Suppliers Association. “We appreciate the White House’s decision to provide additional time to work together on solutions that align with the Administration’s manufacturing and growth objectives while recognizing the complexity of the North American auto manufacturing ecosystem.”
The Tariffs
President Trump had announced 25% tariffs on imports from Canada and Mexico on Monday and increased tariffs on goods from China and Hong Kong to address critical challenges concerning Canadian and Mexican border security as well as the influx of synthetic opioids. These tariffs, stated MEMA in a news release on Tuesday, create a significant risk to vehicle suppliers.
“The community of vehicle suppliers remains fragile from years of industry volatility, workforce shortages, supply chain disruption and the pandemic. Tariffs of this scale place a significant burden on U.S. manufacturers, increasing costs, reducing profitability, impacting American jobs and the industry’s ability to compete globally,” said Long.
He noted that vehicle suppliers operate in all 50 states and are critical to the US economy, representing the largest sector of manufacturing jobs in the U.S. “The tariffs have raised profound concerns across the sector placing additional pressure on the already-fragile supplier industry and its ability to operate absorb the costs, businesses, grow and invest.”
A recent MEMA survey highlights industry sentiment regarding the tariffs:
- 82% of suppliers say tariffs on goods from Mexico will have a negative impact on their business.
- 68% of suppliers say tariffs on goods from Canada will harm operations.
- During the first month of tariffs, suppliers anticipate: cutting or delaying investments (24%), modifying supply chains (21%), cutting U.S. jobs (13%)
- By six months, these impacts are expected to increase significantly: cutting or delaying investments (57%), modifying supply chains (75%), cutting U.S. jobs (47%), shifting production outside the U.S. (33%)
MEMA pointed out that the vehicle supplier industry operates within a deeply integrated North American supply chain, with components frequently crossing borders multiple times before final assembly. The United States-Mexico-Canada Agreement (USMCA) was designed to facilitate regional trade and support economic stability, and these new tariffs represent an unexpected shift for suppliers.
MEMA stated it is eager to continue its collaboration with the Administration to achieve the common goals of U.S. job growth and increased competitiveness, globally.
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