Supplier leaders warn of instability amid tariff, free trade threats

Automotive aftermarket leaders reiterated the dangers to the industry if tariff threats are realized next week, especially when coupled with upheaval to the current free trade agreement, during a global conference.

MEMA Aftermarket Suppliers hosted its annual Global Summit in Miami last week, sponsored by the Overseas Automotive Council. While many topics were discussed, such as growth opportunities in the Latin American market for suppliers, discussions among presenters and attendees often returned to the current geopolitical climate.

On the topic of tariffs, be it those threatened on steel and aluminum or general trade tariffs by the current United States federal government, the general consensus was what many have mentioned over the last month or so since threats came to light: There is little benefit, if any, along with plenty of risk and disruption.

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For instance, Craig Allen, former president of the U.S.-China Business Council, noted that going “tit-for-tat” on tariffs would lead to a “vicious cycle” and lead to higher prices for consumers. In an ideal world, lowering tariffs should be the goal so that prices come down. He hoped that friendlier approaches would be in the future.

Omar Martinez of INA, Mexico’s leading group for automotive suppliers, stressed the importance of continuity around free trade between Mexico, Canada and the United States as the USMCA agreement is up for potential negotiation in 2026. He stressed that so much work has been done between the three countries of the decades, creating deep roots of supply integration, that disrupting that can only lead to a negative outcome for the industry, a bell that would be extraordinarily difficult to unring. He called for leaders to look for ways to improve — instead of destroying — the current situation.

Bill Frymoyer, vice president of public policy at MEMA, highlighted the need for continuity and predictivity among the business community. If there’s uncertainty about disruptions that might be ahead — if tariffs will be implemented or a free trade agreement could be ripped up or heavily altered — it makes them less willing to invest. If there are risks that an investment could be moot, as determined by the whims of a country’s leader, then there could be second thoughts about investing in a supply chain mechanism or building a plant, for example.

Stay tuned to Auto Service World for more information from the event, including deeper dives into discussions on the topics mentioned above.