NADA President Testifies in Front of Department of Commerce

Peter Welch

Subsequent to several automakers and automotive organizations releasing statements regarding President Trump’s tariff plans and implementations, the President of the National Automotive Dealers Association (NADA) provided testimony before the United States Department of Commerce on July 19, 2018. Peter Welch, who is also the CEO of NADA, stated that NADA represents 16,800 auto dealers and service centers, including those for both domestic and international brands of automobiles. At the beginning of his testimony, he made it clear that NADA denies the current administration’s claims that imported autos and auto parts pose a threat to national security and that NADA believes strongly in fair trade and working to keep the U.S. automotive industry successful.

According to a July 2018 Center for Automotive Research (CAR) briefing that Welch referenced throughout his testimony, new car prices would rise between $455 and $6,875 depending on “the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico.” Welch indicated that the CAR briefing also projects that the U.S. gross domestic product would fall by 59.2 billion dollars. Used car prices would increase due to increased demand and reduced supply since consumers would have to opt for the less expensive used cars. Car parts, maintenance, and repairs would likely also see a spike in prices, which will place a large burden on American citizens, many of whom Welch said are already “strapped” to make their current monthly payments. His testimony also included that consumers would be the “hardest hit” due to rising costs and the loss of “almost 750,000 jobs.”

The Peterson Institute for International Economics released a report in late May detailing several tariff scenarios regarding China and indicating that the impact on American jobs and automobile prices will also vary greatly based on how other countries retaliate against the U.S.’s tariff impositions. The report bluntly stated, “These new tariffs defy logic.” A July 20th National Review article reported that riffs with other countries would disrupt the global supply chain and that the “retaliatory tariffs that would surely follow would hurt American automobile exporters.” Japan’s Prime Minister, Shinzo Abe, agreed and released a statement Friday stating that the tariffs would result in many job losses and “cause tremendous damage to the world economy.”

Overall, the tariffs have not been well received by many inside and outside of the United States. Greg Gardner of Forbes reported that numerous employees from Toyota’s U.S. assembly plants arrived in Washington this week to protest the tariffs.  A maintenance worker for Hyundai in Alabama said that thousands of employees would have their livelihoods “put at risk” should the tariffs be implemented. The CEO of Global Automakers, John Bozzella, noted that he is not aware of any companies or individuals that are “calling for protection from international competition,” therefore implying that the alleged national security threat argument is baseless. Despite vehement disapproval of the tariffs and the allegations that imported autos are a threat, Welch indicated that NADA is open to working with the Trump administration to ensure success in the automobile industry; however, it seems like the administration has not paid much attention to any of the opposition.