US Trade and Tariff Implications for Automotive Whitepaper

[The following is an excerpt of the whitepaper]

S&P Global is constantly tracking the multitude of factors impacting the automotive business globally. Recently, changes in the US trade position have become increasingly complicated and risky for suppliers and automakers alike. As of May 2019, the industry is struggling with two of the largest trade issues seen in recent history with serious implications and indicators for the industry that will unfold further in the coming months. 

United States-Mexico-Canada Agreement (USMCA) 

As of 20 May, the United States and Canada agreed to jointly lift the section 232 tariffs on steel and aluminum. These impacts had largely been dealt with through margin reductions at the OEM and supplier level with limited effect on the total supply costs during the last year. (Read more - fill out form on right.) 

China 

In July and August 2018, the United States placed retaliatory tariffs on approximately $50 billion in goods imported from China and had an additional 25% tariff imposed on them. This step was taken with the intent of opening the market to US firms (not requiring Chinese firm ownership stakes), removing the tariff barriers on US goods imported into China (largely automobiles and parts), and a formal codification in Chinese law on intellectual property (IP) rights and legal ramifications for infringement of those rights. (Read more - fill out form on right.)