Earlier this week, a coalition of U.S. auto industry players outlined the devastating impact that will result if the 25% tariffs on auto parts are imposed in the coming weeks. Among the results expected are substantial cost increases for parts which would result in higher costs for vehicles, lower sales at dealerships and difficulty in accessing parts for service and repair.
Some analysts indicate the cost to the industry could reach between $110billion to $160billion and lead to new vehicle auto sales dropping by millions of units. Production stoppages, layoffs and bankruptcy is expected for parts suppliers, many who are already struggling.
The letter, signed by the Alliance for Automotive Innovation and representing nearly all major automakers, the American Automotive Policy Council, the National Automobile Dealers Association, as well as the Vehicle Suppliers Association, and others was delivered to U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent on Tuesday.
25% tariffs on auto parts are expected to go into effect no later than May 3.
Nick Fow, Vice President, Sales at Allianz Trade North America explains how using Trade Credit Insurance can help auto sector companies to manage, protect and maximize their trade receivables. You can listen to his comments here.
