Washington, D.C. -- More than 40 automotive and business groups are warning that new U.S. tariff expansion processes could drive up costs and disrupt parts supply chains for collision repair shops across North America.
The warnings focus on tariff expansion mechanisms under Section 232 of the Trade Expansion Act—one for steel and aluminium derivative products, another for automobile parts. Both allow the Commerce Department to expand existing 25% tariffs with minimal notice.
In a letter to the Office of Management and Budget, 29 groups led by the National Foreign Trade Council and Tariff Reform Coalition said the process "has significant limitations" and creates "a heavy compliance burden." Signatories include the Automotive Body Parts Association, Autos Drive America, the National Association of Manufacturers and the Consumer Technology Association.
A separate letter to Commerce, organized by the U.S. Chamber and signed by over 40 groups including ABPA, warned that August's expansion of steel and aluminum tariffs to 407 product categories created "significant unintended costs, complexity, and uncertainty."
The Chamber said importers must now trace supply chains well beyond direct suppliers, including identifying where steel was "melted and poured" and where aluminum was "smelted and cast." A reporting misstep triggers a 50% tariff. For aluminum, inability to trace sourcing results in a 200% tariff.
The Consumer Technology Association urged government to run the inclusions process in a "narrow, evidence-driven manner grounded in clear national security objectives." The National Association of Manufacturers said a credible system for evaluating industry input is vital, noting a previous inclusion round added over 400 tariff lines.
The first submission window for automobile parts opened January 1 and runs through January 14. Domestic manufacturers can request additional parts be added to the tariff list by claiming increased imports threaten national security.
A recent survey by the Canadian Federation of Independent Business found 65% of auto businesses in Ontario reported being directly affected by tariffs, with an average 13% drop in revenue. Another survey of 50 Canadian shop owners found 90% expect reduced profit margins and 68% anticipate increased costs for parts and materials.
