Customers will feel auto part tariffs, execs say

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Auto parts retailers aren’t pleased with the U.S.-China trade war, as the leaders of some of the biggest brands are making their voices heard.

The U.S. is charging a 25-percent tariff on a long list of Chinese goods – around $200 billion worth. The Trump administration has put off a decision on additional tariffs that specifically target vehicles and auto parts.

Distributors and retailers are still feeling the effects of the trade war. AutoZone CEO Bill Rhodes said that he isn’t happy with the tariffs, and customers will be feeling the added cost, according to a report in Aftermarket News.

“We have a significant amount of products that come out of China,” Rhodes said. “We don’t direct import a ton – less than 10% – but we have a lot of importers that bring it in from China, and then you also have a lot of our products where the components are being manufactured in China and the products are being assembled here.”

Even amid a sunny earnings report, Advance Auto Parts Executive Vice President Bob Cushing also said that those costs are often passed on.

“Without a doubt the 25% of tariffs for this round is a meaningful increase on to our customers, but the industry historically has been able to pass on these increases,” Cushing said, according to Bloomberg.

Auto industry companies and organizations have been vocal against tariff hikes, particularly after the Trump administration mentioned auto imports as threats to national security.

Back on May 6, before the administration raised the tariff on $200 billion in Chinese goods, Auto Care Association CEO Bill Hanvey released a statement that the impact would be immediate and negative. His statement said that auto part imports from China come to more than $20.1 billion.

“While the Auto Care Association supports the Trump administration’s efforts to address China’s unfair trade practices and is encouraged by recent progress made through trade talks, we oppose the use of tariffs as a negotiating strategy,” Hanvey said in his statement. “U.S. companies and consumers end up bearing the brunt of these ‘taxes’ on imported product through disrupted supply chains, increased prices and job losses.”

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