Industry Update on Tariffs and the Right to Repair Movement

Discover how recent shifts in US trade policy are reshaping the landscape of the automotive aftermarket industry. Stacey Miller takes you on a journey through the complex web of tariffs introduced by the Trump administration, examining their far-reaching impacts on both international relations and domestic production costs. Listen as we break down how these tariffs, like the new 10% levy on Chinese imports, particularly affect key auto parts such as ignition wire sets and electric vehicle batteries. We'll also explore the implications of a hefty 25% tariff on steel and aluminum and how these measures aim to bolster American manufacturers, albeit with potential drawbacks like increased costs and supply chain hiccups.

But that's not all—our episode also brings you up to speed on the national right to repair movement, spotlighting recent breakthroughs in Massachusetts. The 2020 amendment granting vehicle owners the right to access and share mechanical data has been upheld, marking a win for consumer rights and sparking similar initiatives across 20 states. We dissect the ongoing legal battles and the efforts to revive the bipartisan Repair Act at a federal level, pushing for broader access to essential repair tools and data. Tune in to grasp the full scale of these developments and learn how you can navigate these regulatory changes with resources from the Auto Care Association.

To learn more about the Auto Care Association visit autocare.org.

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Chapters

• 0:13 Global Trade and Auto Care Impact
• 9:52 National Right to Repair Movement Update
• 15:30 Auto Care Association Podcast Promotion

Transcript

Speaker 1: 0:13

Welcome to Auto Care On Air, a candid podcast for a curious industry. I'm Stacey Miller, vice President of Communications at the Auto Care Association, and this is Traction Control, where we chat about recent news from the global to the local level and what it may mean to the industry, featuring guests on the front lines. Let's roll All right. The key word around here is whiplash, because recent developments in US trade policy have introduced significant changes to tariffs affecting key international partners to the US so Canada, mexico and China, with notable implications for the automotive aftermarket. Earlier this year, the Trump administration proposed a sweeping set of tariffs targeting a broad range of imported goods from countries including China, the European Union and India. On February 1st, president Trump issued three executive orders imposing tariffs on imports from Canada, mexico and China under the International Emergency Economic Powers Act, also known as IEPA. However, facing significant pushback from US industries, trading partners and concerns over inflation, the 25% tariffs on imports from Canada and Mexico have been postponed for one month, until March 4, 2025. Now, what about China? Well, the Section 301 China tariffs implemented in 2018 and 2019 remain in effect, with most tariff rates unchanged since their initial implementation. While some product exclusions have been extended, the majority have expired, except for a limited set, scheduled to expire on May 31, 2025. Additionally, a new 10% tariff on imports from China was imposed under the AIPA, taking effect on February 4, 2025. These tariffs are in addition to existing import duties and taxes, with no exemptions. These tariffs, which would affect auto parts, electronics and raw materials, are positioned as a means to level the playing field for American manufacturers. Business leaders from the automotive sector, including major aftermarket manufacturers, have lobbied against the measures, citing potential cost increases and supply chain disruptions. So what parts are produced in these countries and what does the automotive aftermarket really rely on? So top product categories imported from Mexico include parts like ignition wire sets, seat parts, brake systems and components, gearboxes, catalytic converters, suspension, shock absorbers, spark ignition, reciprocating piston engines and automotive air conditioning parts. Top product categories imported from Canada include those same spark ignition, reciprocating piston engines, gearbox parts, suspension system parts and clutch parts. And, of course, from China, we're very concerned about batteries for electric vehicles, brake rotors, door assemblies, axle parts and other parts and accessories. The most recent data on the American automotive aftermarket industry is that we imported more than half of our automotive parts from Mexico and Canada, with total imports from Mexico comprising over 46% of all total imported automotive parts and parts from Canada, comprising 11%, along with China, comprising 8.5%. Mexico and Canada are the American auto care industry's largest and most critical trading partners, accounting for 58% of auto imports and 76% of auto parts exports in 2023. So the imports of auto parts from Mexico was a little over 64 billion that's the most recent data we have and export 20 billion to Mexico. We import 16 billion from Canada and export 18 billion to Canada and for a total import across the world of $138 billion, and that source is the 2025 Auto Care Factbook.

Speaker 1: 4:11

Now, on February 13th 2025, president Donald Trump signed a memorandum directing the implementation of reciprocal tariffs. This policy aims to equalize the tariffs that the US imposes on imports to match those that other countries levy on American exports. The administration contends that this approach will address trade imbalances and protect domestic industries. However, critics warn that such measures should disrupt established global trade practices and lead to increased costs for consumers and businesses. According to AP News, in a related move on February 10, 2025, president Trump announced a 25% tariff on all steel and aluminum imports, effective March 12, 2025. This action eliminates previous exemptions and applies universally, with potential considerations for specific countries like Australia. The objective is to bolster domestic metal industries and reduce reliance on foreign imports. However, this policy has raised concerns about potential retaliatory measures from trading partners and the broader impact on industries reliant on those materials. According to the Times UK Now, the impact on our industry, which encompasses the manufacturing, remanufacturing, distribution, retail and installation of vehicle parts, equipment and accessories, is poised to experience several effects from these tariff changes.

Speaker 1: 5:35

These effects could include things as increased production costs, that 25% on steel and aluminum imports is expected to raise the cost of raw materials essential for producing automotive parts and, unfortunately, that increase in production costs may be passed down the supply chain, affecting manufacturers, distributors and, ultimately, consumers. Supply chain disruptions are another concern. Reciprocal tariffs and heightened trade tensions could lead to delays and uncertainties in the supply chain. Companies may need to seek alternative suppliers, adjust their sourcing strategies, and that could potentially lead to some inventory challenges and longer lead times. Price adjustments With rising production and importation costs, businesses in the automotive aftermarket may need to adjust their pricing structures and this could result in higher prices for end consumers. Again, we're seeing that downstream impact Market competitiveness. This is by design. Domestic producers might gain a competitive edge due to those increased tariffs on the foreign competitors, but we are seeing reports of higher material costs which could offset those potential advantages.

Speaker 1: 6:45

And navigating those evolving trade policies really requires businesses to stay informed and compliant with those new regulations, potentially increasing your administrative burdens and operational costs. So it is imperative to stay on top of what is happening For the latest resources. Auto Care Association is on top of it for you. So if you visit autocareorg slash trade, you can see the latest documentation, news, webinars, media coverage, as well as a place to share the impact that tariffs would or are having on your business, and these stories are crucial for us to share with the administration. So you can share those with us by visiting autocareorg slash trade, where you'll see a button to contact our director of international affairs on that webpage and you can share your story to help us figure out how we should be responding to this. So, in conclusion, the recent implementation of reciprocal tariffs and increased duties on steel and aluminum imports are poised to significantly impact our industry and, while the temporary hold on broader proposed tariffs offers some relief, stakeholders should prepare for the potential cost increases, adjusting your supply chain and strategic shifts to navigate this evolving trade landscape. We're going to do everything we can to keep you on top of this news and the recent developments, follow here at AutoCare, onair and also AutoCareorg for the latest Shifting gears.

Speaker 1: 8:13

Now to right-to-repair. In early February 2025, a significant legal milestone was reached concerning Massachusetts' automotive right-to-repair law. Us District Judge Denise Kasper dismissed a lawsuit filed by the Alliance for Automotive Innovation, a trade group representing major automakers, which sought to overturn the state's voter-approved measure expanding access to vehicle repair data. This ruling affirms the state's commitment to ensuring that independent repair shops and vehicle owners have access to necessary diagnostic and repair information. Now, if you remember, the origins of this legal battle trace all the way back to November 2020, when Massachusetts voters overwhelmingly approved question one, which was a ballot initiative that amended the 2013 right to repair law. That original law is known as the motor vehicle owners right to repair act, which guarantees every car owner's right to have their vehicle serviced at the repair facility of their choice. The industry's wildly successful campaign in Massachusetts really paved the way for a national solution, which was eventually finalized in a 2014 memorandum of understanding between the Auto Care Association, the Coalition for Auto Repair Equality, also known as CARE, c-a-r-e and vehicle manufacturers. For the first time ever, new car manufacturers must make the same service, information and tools available to independent repair shops that they provide for their franchise dealers as part of that law, and that MOU has become the model for right-to-repair agreements across the US for many of the industries mentioned above.

Speaker 1: 9:52

Massachusetts right to repair law and subsequent national agreements specifically excluded telematics, which is that data that's transmitted wirelessly from the vehicle to the manufacturer, and in order for the independent auto care industry to maintain and service today's connected vehicles, we have to be granted access to that repair and maintenance information. So our industry once again took the fight to Massachusetts in 2020 in order to ensure right to repair applies to this new generation of vehicles, and that 2020 amendment would provide car owners with access to their mechanical data and permit owners to share that data with the repair shop of their choice. Now, shortly after that bill passed in 2020, the Alliance for Automotive Innovation challenged the law in federal court, citing concerns over cybersecurity and potential conflicts with federal regulations. The lawsuit argued that providing open access to vehicle telematics could compromise safety and violate federal laws governing vehicle emissions and safety standards. Safety and violate federal laws governing vehicle emissions and safety standards. Now the Auto Care Association, both on its website as well as throughout the court case has demonstrated that that is not true, and you can find all that information in those documents. But the point is that vehicle manufacturers, who profit off of selling vehicle data and restricting independent repair shop access, spent millions of dollars to scare Massachusetts voters into opposing this measure and engaged in voter suppression efforts. That included urging federal lawmakers to preempt the state ballot measure without any federal standards in place that will ensure that owners have transparency and control of data generated by their motor vehicles. The automakers then filed a lawsuit to overturn the voter-approved law and the case went to trial in the summer of 2021. A verdict on that case has been delayed seven times until now. So in January 2025, the case was reassigned to Judge Kasper, who expedited the proceedings and issued a decisive ruling in February 2025, dismissing the automaker's claims. This decision underscores the judiciary's support for consumer rights and the accessibility of vehicle repair data to promote fair competition in the automotive repair industry. Now, despite this legal victory, the automakers have expressed concerns about potential security risks and is evaluating options for appeal. No surprise. Meanwhile, massachusetts Attorney General, Andrea Joy Campbell, lauded the ruling as a significant win for consumers, emphasizing that it empowers vehicle owners to choose where and how their vehicles are serviced. This landmark case in Massachusetts really reflects broader national discussions on the right to repair, as various states consider similar legislation to balance consumer rights, technological advancements and cybersecurity considerations in the automotive sector.

Speaker 1: 12:50

Beyond Massachusetts, the right to repair movement is gaining momentum across the United States. As of February 2025, 20 states have introduced active right to repair legislation addressing various products, including vehicles. Notably, states like Hawaii, kansas, maine and New Jersey have proposed bills specifically targeting automotive repair rights. Now you may be wondering what's happening at the federal level. The Auto Care Association and partners are hoping to reintroduce the Right to Equitable and Professional Auto Industry Repair Act, and that is also known as the Repair Act in the US House of Representatives. This bipartisan legislation aims to ensure vehicle owners and independent repair shops have access to the necessary tools and data for vehicle maintenance and repair, promoting consumer choice and fair competition in the automotive repair industry. Many of you have been tremendous supporters of the Repair Act and unfortunately we just ran out of time in the last Congress, so our hopes to reintroduce it here soon. We'll be sure to keep you updated on autocareorg via email and all of our social channels on how you can support the reintroduction of that bill and getting that to the floor for a vote Now.

Speaker 1: 14:05

In the meantime, if you're looking to get involved in the movement, we have an updated call to action for you and one of the most important things you can do to help us is obtain examples of barriers to repair from your shop and service center partners. So if you can't repair it, you've got to report it. So for technicians and shop owners that may be listening or please share this with your technician and your shop owner partners please report issues with diagnosing or fixing vehicles in your service base so you can help us fight for your right to repair. So if you're unable to properly diagnose a vehicle, you're forced to send a customer's vehicle back to a dealer service facility. We need to know about it.

Speaker 1: 14:48

Reports of automakers restricting access to both wired and wirelessly generated vehicle diagnostic and repair information are increasing and we need to continue documenting those stories to show the impact. Responses can remain anonymous and if you don't speak up, we won't be able to ensure our right to repair. So if you have a story that you'd like to share, even if you're not sure, you can share with us on our homepage at autocareorg and we'll have one of our experts call you, if you so choose, if you need to share more details about that story or you're not sure what you should be sharing. So we do appreciate the collaboration and we look forward to giving you another Right to Repair update soon.

Speaker 1: 15:30

Thanks for tuning in to another episode of Auto Care On Air. Make sure to subscribe to our podcast so that you never miss an episode, and don't forget to leave us a rating and review that helps others discover our content. Auto Care On Air is a production of the Auto Care Association, dedicated to advancing the auto care industry and supporting professionals like you. To learn more about the association and its initiatives, visit autocareorg.