US Auto Industry Warns Tariffs on Auto Parts Could Lead to Factory Closures and Job Losses

U.S. to Impose Tariffs on Auto Parts Starting May 3
Concerns Over Supply Chain Disruptions and Rising Consumer Prices

On April 22 (local time), the U.S. automotive industry requested the cancellation of President Donald Trump's proposed 25% tariff on imported auto parts, warning that it could disrupt the global automotive supply chain.

According to Bloomberg News, organizations representing major U.S. automakers, including the Alliance for Automotive Innovation (AAI), the American Automotive Policy Council (AAPC)?which is led by Detroit's Big Three manufacturers GM, Ford, and Chrysler?and the National Automobile Dealers Association (NADA), made this statement in a letter released on the same day.

The U.S. auto industry warned that the tariffs on foreign auto parts, scheduled to take effect on May 3, could lead to factory closures and job losses in the United States.

They also stated, "Tariffs on auto parts will disrupt the global automotive supply chain." They added, "This will trigger a domino effect, including higher consumer vehicle prices, decreased dealership sales, increased costs for vehicle maintenance and repairs, and reduced predictability."

On March 26, President Trump announced that he would impose a 25% tariff on imported foreign automobiles and auto parts, citing Section 232 of the Trade Expansion Act.

As a result, tariffs on automobiles have been imposed since April 3, and starting before May 3, tariffs will also be applied to key auto parts such as engines, transmissions, and powertrains. If President Trump's 25% tariff on imported vehicles is not eased, it is expected that car prices in the U.S. market will rise starting this summer. Bloomberg News reported on April 16 that major automakers such as Ford plan to freeze prices until next month, but after that, price increases will be inevitable. German automaker Volkswagen also indicated that there could be price increases for vehicles sold in the U.S. starting in June.

However, on April 14, during a meeting with President Nayib Bukele of El Salvador in the Oval Office, President Trump suggested the possibility of delaying the tariffs, stating that "some of the U.S. automakers are shifting production of parts that were made in Canada and Mexico to here (the United States). However, they need a little more time."