Auto Care Association Senior Vice President of Government and Regulatory Affairs, Aaron Lowe, has testified before the Office of the United States Trade Representative (USTR) on the anticipated negative effects of the Trump administration’s Section 301 tariffs on automotive parts and components imported from China.
The tariffs are part of a proposed action by the administration to address unfair acts, policies and practices by China that are related to technology transfer, intellectual property and innovation. The Auto Care Association supports the administration’s efforts to address China’s unfair trade policies but cautions the administration to evaluate the potential economic harm and unintended consequences as the imposition of additional tariffs could raise prices for U.S. consumers and cause U.S. companies to be less competitive in the U.S. and in global markets.
“Our members report that a number of products included on the tariff list cannot be sourced in the U.S. as there are no U.S.‐based factories producing some of these products, said Lowe. “At the same time, minimal alternative sources exist, as China is the primary supplier to the world. Therefore, we do not see any benefits to the U.S. economy or U.S.‐based manufacturers when imposing tariffs on these products, as sourcing would just shift to low‐cost countries and would not alleviate the overall U.S. trade imbalance.”
Lowe testified during the USTR’s public hearings that are taking place May 15-17, 2018.
Earlier this week, the Auto Care Association submitted comments to USTR regarding the impact of the proposed Section 301 actions on the automotive aftermarket industry. As outlined in the comments and a recent multi-industry letter, of which the association was a signatory, the association and its members believe that the imposition of tariffs will disrupt complex global supply chains “that cannot be shifted to different countries or facilities without compromising contracts, compliance, quality and value for the consumer.”
The Auto Care Association says that it is urging the Trump administration to continue engaging in dialogue with China to construct a fair and enforceable bilateral trading system that will level the playing field and protect U.S. companies doing business in China.