In testimony before the United States Trade Representative, the Motor and Equipment Manufacturers Association (MEMA) pointed to major potential problems with the administration’s proposed 25 percent tariff on numerous Chinese products.
While the Trump Administration has concluded such steps necessary to combating intellectual property theft and cracking down on what they call unfair trade, MEMA has noted the United States is not a lone wolf, able to break from the global economy on a whim. In testimony, Ann Wilson, MEMA’s senior vice president of government affairs, pointed to China’s importance as a trading partner and the extent to which U.S. motor vehicle suppliers rely on its manufacturing capabilities.
“Domestic capacity is simply not available for some of the materials and parts from China relied on by suppliers,” Wilson said. “These parts are necessary to enable domestic vehicle suppliers to continue their U.S.-based operations. The proposed tariffs on the listed products relied on by suppliers will cause disproportionate harm to U.S. interests by disrupting American manufacturing operations, and increasing costs, both to U.S. producers and consumers. The increased costs will place a significant harmful burden – particularly on small and medium businesses – including the possibility of forced bankruptcy and loss of income.”
Certain motor parts and equipment are included in the proposed 25 percent tariff. For their industry, MEMA attests that the price of proposed tariffs would consist of job losses, company closures, restricted access to materials and parts, and reduced investment.
“MEMA recommends bilateral discussions between the U.S. and China before implementing any tariffs that will harm our industry, job creation, domestic investments, and the overall U.S. economy,” Wilson said.
MEMA previously provided support for Wilson’s testimony with written comments to the USTR. Many products they have, at the least, sought exclusion for under the looming tariff are necessary to manufacture components in the motor vehicle supplier industry.