Auto Parts Trade Associations Join Forces In Push For Lower Steel Tariffs

Autoparts Report, Oct 3, 2002

Three automotive industry trade associations said they will work cooperatively to obtain relief for their members affected by the Bush Administration's steel safeguard program, seek a closer review by the government on the effects of the program on producers of motor vehicle products and discuss future policy options.

The joint effort will involve the Automotive Aftermarket Industry Association (AAIA), the Motor & Equipment Manufacturers Association (MEMA) and the Specialty Equipment Market Association (SEMA).

The Section 201 tariffs on imported steel, implemented in March 2002, boosted tariff by as much as 30 percent on certain steel products used in the manufacture of automotive parts. As a result, raw material cost increases, as related to domestically produced steel, have ranged from 20 percent to 50 percent.

The program continues to impose significant hardships on automotive product manufacturers, exposing them not only to climbing steel prices, but also to slower deliveries and widespread shortages, the automotive associations said in a statement.

American producers of motor vehicle products, who traditionally purchase an estimated 95 percent of their steel from domestic sources, are facing a number of drastic measures such as layoffs, plant slowdowns and shutdowns, and profit warnings as a result of this program, according to the trade associations.

U.S. suppliers have begun to lose business to foreign competitors who are able to purchase steel at global prices and who do not face the pressure of the tariffs. In many other cases, the squeeze on steel is forcing U.S. producers of motor vehicle products to import finished products that before were made in America, the associations said.

The Section 201 tariffs pose a critical threat to the overall U.S. automotive supply chain, according to the associations.

The associations said their collaboration will strengthen this ongoing effort and benefit member companies by creating a more unified voice to address the impact of steel tariffs on producers of motor vehicle products. At the same time the associations will continue to support the administration in its efforts to find long-term solutions to the problem of excess global steel capacity.