John Bozzella, President and CEO, Association of Global Automakers, Inc. written testimony before the Senate Health, Education, Labor and Pensions committee hearing on the “Impact of Zero Tariffs On U.S. Autoworkers.”
- The U.S. Auto Industry today comprises fourteen companies that build cars and trucks in the United States, with a fifteenth scheduled to begin production in 2021. This investment supports a value chain of U.S businesses across the country providing components, sales, service, logistics and support employing - directly and indirectly - 10 million Americans. Many of these workers could be harmed by potential tariffs on auto and auto parts imports.
- U.S. tariffs placed on imports are taxes paid by Americans. If punitive tariffs of 20-25% are imposed on auto- and auto-parts imports, as the U.S. Department of Commerce is now considering, new vehicle prices will increase by as much as $7,000.1 Every vehicle sold in America would see price increases because a global supply chain supports high-value auto manufacturing in the U.S. This will reduce demand for new cars, creating excess manufacturing capacity across the country. Used car prices would also rise as new cars become less affordable. The cost of servicing and maintaining vehicles would increase as imported parts are taxed. U.S. trading partners would retaliate with tariffs on our exports. As a result, 624,000 Americans could lose their jobs.
- Current trade policy has fostered a healthy and competitive auto industry in the United States and created robust markets for U.S.-built vehicles all around the world.
- This success at home and abroad has led to an unprecedented era of innovation in the auto industry. International automakers have invested significantly in R&D, employing hundreds of highly skilled engineers at 65 facilities in 16 states.
- Innovation has reshaped the workforce as well. Today’s auto production jobs are high-tech, highly-paid, career-building opportunities for which there is a shortage of talent. Therefore, auto manufacturers have invested heavily in workforce development initiatives such as apprenticeship programs, and partnerships with local high schools, colleges, and universities to train the next generation of manufacturers.
- When America does trade the right way, it creates more investment and more opportunities for American workers. The success of international automakers over the last several decades should inform policymakers as they reexamine trade policy and consider restrictive measures such as tariffs.
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