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By David Shepardson
WASHINGTON (Reuters) -Two Michigan business groups urged President Donald Trump to halt plans to impose sweeping 25% tariffs on imported vehicles and parts, saying it would lead to dramatic price hikes, supply-chain disruptions and pain in the auto-heavy state.
"The increased costs would cause significant disruption throughout the supply chain and, perhaps most importantly, lead to significant price increases to the cost to American consumers for vehicles," the Detroit Regional Chamber and MichAuto, an automotive and mobility association, said in a letter.
"In Michigan, where one in five jobs is automotive-related, the pain felt by working-class citizens will be profound." The auto sector contributes about $300 billion to Michigan’s economy annually, according to the Detroit Regional Chamber.
Trump last week followed through on weeks of threats for new tariffs on imported cars, saying a 25% import tax on vehicles not built in the U.S. would kick in on April 3 - on top of previous duties. He could also add new duties on autos as part of sweeping new tariffs he will announce Wednesday.
The groups said that the tariffs will damage the state’s automotive industry and economy, noting there are more than 1,000 automotive suppliers based in Michigan.
"The tariff policies proposed will increase prices, drive down consumer demand, and therefore, lower the profitability of our companies, directly impacting the hardworking Americans who assemble the iconic vehicles," the letter added.
Higher new vehicle prices could prompt some owners to hold on to old vehicles longer, raising used car prices. "These increased vehicle costs will be disproportionately borne by working-class and middle-class families," the letter said.
In response, White House spokesperson Kush Desai noted automakers like Hyundai have announced new investments in the United States and argued those investments and Trump's call for a new tax deduction on interest on car loans "will continue to drive historic manufacturing and job growth."
A group representing General Motors, Ford, Toyota, Stellantis and others warned the tariffs will hike vehicle costs. Hyundai told auto dealers they may need to adjust prices if the tariffs take effect.
(Reporting by David Shepardson in WashingtonEditing by Chris Reese and Matthew Lewis)
