As per the CEO of Interos.ai, Ted Krantz, the U.S. heavily relies on foreign imports for its steel, aluminum, and auto parts supply chain. President Donald Trump confirmed that there would be no exemptions for tariffs on steel and aluminum, and additional import duties on various products, including cars, lumber, and appliances, would be enforced from April 2. Trump emphasized that the tariffs would be reciprocal to match what other countries are charging. He also stated that there would be extra tariffs on automobiles, steel, and aluminum, with no plans for exemptions.
Krantz expressed concerns that the tariffs on steel and aluminum could significantly impact the U.S. automotive manufacturing sector. Interos.ai, based in Arlington, Virginia, specializes in supply chain risk intelligence. Krantz highlighted that the automotive industry is a key sector, with around 3% of the 400,000 affected companies involved in manufacturing. He estimated that additional costs due to tariffs could amount to nearly $6,500 per vehicle, ultimately passed on to consumers. The supply chain for steel, aluminum, and auto parts, including rubber and plastics, heavily relies on imports from overseas.
Trump postponed the implementation of across-the-board tariffs for Canada and Mexico until April 2, citing a plan to possibly impose reciprocal tariffs on Canadian lumber and dairy products soon. Krantz underlined the complexity of the supply chain, noting that China and India are the top sources for steel, followed by a 20% combination of Mexico, Italy, and Germany. The sector's high dependence on these sources poses challenges.
In February, Trump imposed a 10% tariff on Chinese goods, which was increased to 20% in March. In response, China implemented duties on U.S. food products starting March 10. Krantz predicted that the impact of disruptions with China would be more enduring and complex compared to other trade tensions. He suggested exploring alternative import and export opportunities beyond China, particularly in Asia-Pacific regions, which could offer a more feasible solution. The geopolitical tensions with China may have a more prolonged and significant impact than those with Canada and Mexico.