In a letter to President Donald Trump, the Specialty Equipment Market Association (SEMA) is highlighting the impact of tariffs on the nation’s automotive aftermarket industry. It’s an industry that contributes nearly $337 billion in economic impact to the U.S. economy. The letter suggests/highlights ways that the administration can support domestic manufacturers during this transition period.
“Our primary request is that American automotive parts manufacturers, including our members, be provided a transition period to re-shore their manufacturing, as well as some form of economic relief to assist in that transition,” writes SEMA President and CEO Mike Spagnola. “That relief could include tariff exemptions for things like molds, tooling, and machinery brought back to the U.S., as well as tax incentives to offset the associated costs.”
The letter also sheds light on impacts that the Trump Administration might not be aware of. This Includes: Experienced companies that want to bring their operations back to the U.S., as well as ways domestic producers of steel and aluminum that are making it hard for Made in America companies to stay competitive. Here is SEMA’s letter in its entirely…
April 21, 2025
Dear President Trump,
On behalf of the Specialty Equipment Market Association (SEMA) and its
more than 7,500 members that drive innovation in the specialty automotive
aftermarket industry, we write to commend you and your administration for
your commitment to restoring the greatness of American manufacturing.
We agree with you that U.S. manufacturing is critical to our nation’s
economic prosperity and national security.
The specialty automotive aftermarket industry is comprised of
manufacturers, distributors, and retailers of specialty parts and
accessories for motor vehicles. The industry supports over 1.3 million jobs
across the U.S. and contributes nearly $337 billion to the American
economy each year through the production, sale, and installation of
performance, functional, restoration, and styling-enhancement products
for use on passenger cars, trucks, SUVs, and special interest collector
vehicles. The specialty automotive aftermarket is a true asset to the
nation’s economy and proof of America’s manufacturing superiority and
ingenuity, which is led by its small business entrepreneurs.
Your return to the White House has given significant hope to our industry,
including the businesses that manufacture products to modify internal
combustion engine vehicles, as well as those supporting customers who
seek motorized access to federal lands for recreational purposes. SEMA
and our members are steadfast in our belief that your Administration will
deliver much-needed regulatory relief and support that will allow small
businesses to thrive.
Because you’ve shown a commitment to the success of small businesses
and our industry, I write to highlight several challenges that the specialty
automotive aftermarket industry faces because of tariffs on auto parts,
steel/aluminum, and components imported from around the world,
including China. It is our hope that you will continue to stand with our
industry and businesses nationwide by providing the necessary support
they require for continued success. Additionally, our industry needs long-
term certainty that the investments our member businesses make to bring
manufacturing to America is sustainable in the long term. This can be
achieved through positive tax policy and regulatory reform.
Our primary request is that American automotive parts manufacturers,
including our members, be provided a transition period to re-shore their
manufacturing, as well as some form of economic relief to assist in that
transition. That relief could include tariff exemptions for things like molds,tooling, and machinery brought back to the U.S., as well as tax incentives
to offset the associated costs.
For example, one of our Louisiana-based manufacturers wants to bring
their manufacturing operations back to the U.S. However, under the
current tariff regime, their molds and tooling will be subject to tariffs.
Further, the machinery this company needs is only made overseas, limiting
their vendor options to those located in Germany and China. Given that
one of the machines currently costs $600,000, tariffs will make it
significantly more expensive; if sourced from China, the cost of that
machine will more than double. This presents a significant hurdle in their
re-shoring efforts and renders such options economically untenable. This
company, as well as other SEMA members, have offered to share the
financial models and specific plans with you and your team. They support
your objectives but need a bridge to assist with the transition.
Because of their smaller margins and need to pay upfront for goods and
services, small and medium-sized businesses are among the hardest hit
by tariffs. The tariffs are exacerbating cash flow issues, delaying payments,
and reducing capacity/inventory. Perhaps the greatest barrier they face is
sudden, unpredictable changes to their supply chains.
While you have rightfully used tariffs to incentivize companies around the
world to manufacture their products in America, they are resulting in
unintended consequences for U.S. manufacturers in our industry. In fact,
many domestic businesses that manufacture their products in the U.S. are
being directly and indirectly impacted by the tariffs, which make it a
challenge for these companies to remain profitable.
For example, our members face higher-priced raw materials when they
source steel and aluminum from domestic producers, who have used the
tariffs on their foreign competitors as a way to raise their own prices. Such
price increases from domestic sources are especially hard on small
manufacturers who follow Made in America standards and do not buy at
volume levels that allow them to negotiate prices like large companies can.
For many specialty automotive businesses that manufacture their products
in America, they are forced to source components used in their products
from international suppliers, because there are no domestic manufacturers
or none that will produce components in smaller volumes that meet their
needs. For businesses in this position, they have no choice but to source
components from abroad. We are hopeful that your efforts to expand
American manufacturing will help to address this challenge, but our
members are concerned about the tariffs they will face during the
transition period, which many expect to take at least 18 months.SEMA recently surveyed its members on the impact of tariffs to better
understand their impact on industry businesses. While our members have
traditionally been very supportive of you and your administration’s policies,
the responses were overwhelmingly negative regarding the disruption
caused by the tariffs. Industry businesses are fearful of the uncertainty
they are creating for their customers, businesses, and employees; the
tariffs’ impact on their sales; and their ability to maintain their workforce at
previous levels. Some companies have already started to lay off American
workers, while others have shared plans to do so without policy changes
or significant relief.
As you and your administration chart tariff policy moving forward, SEMA
asks that you consider the unique challenges that small automotive
manufacturing businesses face, including in changing up their vendors
and supply chain in a short amount of time, and look for ways to help ease
this impact on them during this transitional period of reshoring
manufacturing.
Thank you for your consideration of this request. I welcome the chance for
SEMA to work with your administration to bring even more specialty
automotive aftermarket jobs to America.
Sincerely, Mike Spagnola, President and CEO
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