Automotive industry reacts to Trump tariff plans

Photo credit: Bloomberg

President Donald Trump said on Thursday he will levy tariffs against overseas steel and aluminum — 25 percent on the former, 10 percent on the latter — with Mexico and Canada exempt, for now. The automotive community is questioning the potential fallout from those plans, which many expect to spark a trade war. Here’s what is being said industrywide:

John Bozzella, president of the Association of Global Automakers: “Exemptions will not address the fundamental problems tariffs will create for U.S. car and truck manufacturing.”

Honda Motor Co.: “History has shown that tariffs imposed on imported steel could raise prices on both domestic and imported materials, thus causing a financial burden on our customers.”

Mary Barra, General Motors CEO, told CNBC: “I think you do have to look at if changes occur that drive the cost up, it will have a direct impact on demand, because there is an affordability issue with cars we have to stay cognizant of. If there is an increase to the point that people stop buying cars and used cars, that will affect jobs.”

Ford Motor Co. spokeswoman Christin Baker: “Despite the fact that Ford buys the vast majority of its steel and aluminum for U.S. production in the U.S., this action could result in an increase in domestic commodity prices — harming the competitiveness of American manufacturers.”

Volvo Cars CEO Hakan Samuelsson: “The whole system is less efficient, so that means there is less money for quality improvement and product development. The real loser is the consumer.

“Any country that tries to protect its own industry ends of putting consumers in a position where they have to except poor quality.”



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Volkswagen CEO Matthias Mueller: “For ages the world has been working for globalization and now America does another way. Why? I don’t know.”

BMW CEO Harald Krueger: “I am not worried for the BMW group, because we are probably in the best situation compared to all others. We have our biggest plant in Spartanburg, South Carolina … so we are much more protected than other companies. Our business model is definitely based on free trade … and if you would be in a trade war, this would have an impact.”

Daimler CEO Dieter Zetsche: “I don’t know if we have to be afraid. My conviction always was and always would be that free trade benefits everybody. We have seen places where developments went in the other direction, which typically was not good for the world economy. But it is too early to tell what would happen.”

Subaru Corp.: “We are unaffected, all [of] our steel [is] U.S. sourced.”

AFL-CIO President Richard Trumka: “Using tariffs isn’t going to start a trade war. There’s been a war on working people for decades, and we have been getting our butts kicked. Tariffs are a common-sense mechanism for trade enforcement and the best way to start fighting back.”

Unifor National President Jerry Dias: “This isn’t a victory, it’s a threat. The U.S. is now holding tariffs over Canada’s head at the NAFTA table ahead of the next round, which uncoincidentally will take place in Washington. The auto supply chain is completely intertwined. A cost increase of this magnitude will drive consumers directly into the arms of Japanese car makers.”

Flavio Volpe, president of the Canadian Automotive Parts Manufacturers’ Association: “This is a sector that operates on single-digit margins, and restricting the flow of its most important materials under the guise of national security is reckless. Raising these dubious policy pitchforks in defense of manufacturing jobs usually just pokes out the lights inside the factories they pretend to defend.”

The United Steelworkers union national director Ken Neumann: “The evidence is clear that Canadian steel and aluminum imports are not part of the problem that the U.S. administration is trying to address through its Section 232 investigation. Canada clearly is not one of the ‘bad actors’ that engage in unfair trade and dumping of aluminum and steel into the United States.”

The Motor & Equipment Manufacturers Association CEO Steve Handschuh: “We have voiced repeatedly that while we support the administration’s focus on strong domestic steel and aluminum markets, tariffs limit access to necessary specialty products, raise the cost of motor vehicles to consumers, and impair the industry’s ability to compete in the global marketplace. This is not a step in the right direction.”

Cody Lusk, president of the American International Automobile Dealers Association: “Even with limited exemptions, tariffs will raise the sale prices of new vehicles, turning off price-sensitive consumers and leading to a dip in both auto sales and auto-related jobs.”

NADA President Peter Welch: “Whatever the issue, NADA will always be on the side of maintaining vehicle affordability for our customers. Not only do we weigh every proposal against that affordability test, we ask policymakers to do the same thing so that we can sustain economic growth.”

Michael Hatch, chief economist for the Canadian Automobile Dealers Association: “Since it will apply to imports to the U.S. there doesn’t seem to be an immediate impact on car dealers in Canada. As for our own exports — for now we have an exemption to the tariffs, which obviously is good news for the Canadian steel industry. In general we are supportive of free trade and we hope this will be a temporary move that won’t result in significant retaliatory measures or a full scale trade war, which no one can really win.”

Cox Automotive Senior Economist Charlie Chesbrough: “A likely result from these new steel and aluminum tariffs is that costs will increase throughout the supply chain, driven by higher raw material prices.”

Kristin Dziczek, director of the Industry, Labor & Economics Group at the Center for Automotive Research (on CNBC): “It is important to point out that none of this is policy yet.”

Aluminium Association of Canada President Jean Simard told The Canadian Press:

“There’s enough uncertainty to hinder any potential expansion project, because you know, you don’t predicate billions of dollars of investment on expansions when you don’t know what’s hanging out there in the future.

“The U.S. is going to be the most expensive place in the world to buy aluminium, which is not good for anyone.”

Canadian Steel Producers Association President Joseph Galimberti told The Canadian Press:

“This is just the world now, it just is…even if there is a completed NAFTA, I don’t think we can go back to a place where we’re like ‘things are great, it’s all cool.'”

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