The Automotive News article, “How Trump’s new tariff probes work and what they could mean for automakers,” discussed newly launched trade investigations into key U.S. trading partners citing excess auto manufacturing capacity overseas and potentially setting the stage for a fresh round of tariffs this year.
According to the article, the administration hopes to effectively replace its temporary global tariff with new, permanent duties on trading partners following the conclusion of trade investigations, which the Office of the U.S. Trade Representative initiated in March. Those investigations are taking place under Section 301 of the Trade Act of 1974.
Michael Brady, executive partner of the Warner Norcross + Judd LLP Detroit office and co-chair of the firm’s Automotive Industry Group, explained the approach: “The difference between these 301 tariffs, as opposed to the [reciprocal] tariffs, is there’s a process here. The administration can’t just say today it’s going to be a 50 percent tariff and tomorrow it will be something different.”
The auto industry is likely to advocate for imports of vehicles, parts and metals already subject to other tariffs to remain exempt from new ones. Executives and industry analysts have pointed to those exemptions, as well as a tariff offset program, as major factors in preventing worst-case production scenarios.
“It was definitely a concern that automotive was referenced” in the investigation notices, Brady said. “But I think it’s too soon to give any opinion on whether they would stack those or not.”
In any case, the administration is unlikely to implement new tariffs until at least July, Brady said. “And then we still don’t know what the administration’s ultimate decision will be in terms of what tariffs to impose, if any, and on which countries,” he said. “We obviously are in an election year, so that might impact decisions.”
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With deep roots in the heart of the U.S. automotive industry, Warner’s Automotive Industry Group provides proactive, timely and cutting-edge advice to suppliers throughout Michigan, North America and around the globe. Warner attorneys are recognized leaders in every area of law that impacts the global automotive and mobility market and understand the complex relationships between parts suppliers and vehicle manufacturers. Firm attorneys stand ready to assist suppliers assessing their current contracts and risks from tariffs.
