SEMA Urges U.S. to Provide Transition Period, Financial Relief to Small Parts Manufacturers

SEMA recently addressed a letter to President Donald Trump highlighting the impact of his proposed tariffs, and what could be done to help the automotive industry through it.

The organization stated that its members will face unintended consequences as a result of tariffs, with domestic producers of steel and aluminum using tariffs on foreign competitors to justify raising their own prices. 

For small manufacturers following Made in America standards, they typically are not buying at the same value level as large companies, making it harder for them to negotiate on prices.

“For many specialty automotive businesses that manufacture their products in America, they are forced to source components used in their products from international suppliers, because there are no domestic manufacturers or none that will produce components in smaller volumes that meet their needs,” reads the letter.  “For businesses in this position, they have no choice but to source components from abroad.”

SEMA’s letter outlines actions the government could take to relieve this burden on small manufacturers—specifically, providing a transition period for automotive parts manufacturers to re-shore their manufacturing. Additionally, SEMA highlighted the need for economic relief to assist the transition, such as tariff exemptions for things like molds, tooling, and machinery brought back to the U.S., as well as tax incentives to offset the associated costs.

As an example, SEMA pointed to one of its Louisiana-based manufacturers looking to bring its manufacturing operations back to the U.S., but faces tariffs on the necessary tooling and molds. In addition, the machinery needed is only made overseas, restricting vendor options to Germany and China. With one machine costing $600,000, it would more than double if sourced from China.

“This presents a significant hurdle in their re-shoring efforts and renders such options economically untenable,” explained SEMA. “This company, as well as other SEMA members, have offered to share the financial models and specific plans with you and your team. They support your objectives but need a bridge to assist with the transition.”