Tariffs to Limit Sources for Auto Parts

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August 17, 2018—Businesses affected by the auto parts industry, including collision repair shops, could scramble to cope with President Donald Trump’s tariffs on imported Chinese materials and goods, reported Transport Topics, especially as those tariffs could limit where auto parts retailers can source their parts.

Steep levies already have boosted costs of some products made with steel and aluminum, and more duties could affect hundreds of other items these companies develop, make and sell—including tires and rearview mirrors, windshields and windshield wipers.

Brian Cohn, president of Jupiter, Fla.-based Multi Parts, said the company’s typical flow of orders has slowed, and higher prices on materials have led him to stop hiring new workers.

Multi Parts’ facilities in Shanghai, Hong Kong and Belarus manufacture components including brake and wheel cylinders, wheel hubs and valve-timing solenoids. Customers include parts distributors and other manufacturers of auto-repair products.

While the tariff threat is broad, it actually may affect less than 15 percent of retailers’ inventory, according to Wedbush Securities Inc. analyst Seth Basham: Auto parts stores source 50-60 percent of their products from China, but only 20-25 percent of these are included in the latest round of tariffs, he said. These duties cover a wide variety of imports with a total value of more than $200 billion and won’t take effect until after a comment period ends Sept. 6.

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