The Motor and Equipment Manufacturing Association (MEMA) recently sent a report to members of Congress on the economic impacts if the North American Free Trade Agreement (NAFTA) would be renegotiated or modernized.
The report outlines the economic impact of the motor vehicle parts manufacturing industry on the U.S. economy. It was commissioned by MEMA earlier this year and conducted by the Boston Consulting Group.
U.S. companies operate with customers and facilities globally.
“Hindering American competitiveness could drive up costs per vehicle substantially, and it would place the U.S. motor vehicle companies at a disadvantage against other countries, which import about the same components from low-cost countries as their U.S. counterparts do now,” the report said.
MEMA urges the Trump Administration to enforce intellectual property rights, create forums for investor disputes, promote a regulatory system, and encourage cooperation the industry and participating countries to improve international trade.
MEMA representatives have previously encouraged Congress to modernize NAFTA, but do so with extreme care.
Increasing tariffs from between 20 percent and 35 percent would add $16 billion to $27 billion to automotive costs, the report said. This increase would also result in 25,000-50,000 job cuts.
Since 2012, motor vehicle parts suppliers directly created 871,000 jobs, a 19 percent increase.