Alabama automakers call for trade stability as they face tariffs, high prices and EV struggles

Automakers are navigating a period of intense turbulence as they balance shifting consumer demands, rising costs, and a growing challenge from global competitors. With the American market cooling on electric vehicles and shoppers feeling the strain of high prices, the industry is searching for a more predictable path forward.

Trade Stability at the Forefront

These concerns brought together representatives from Alabama’s automotive sector, along with state and federal officials, for a roundtable discussion at Birmingham’s Innovation Depot this past Monday. A primary focus of the meeting was the ongoing renegotiation of the US-Mexico-Canada trade agreement. As the second-largest state for auto exports in the U.S., Alabama relies heavily on its neighbors, with Canada and Mexico serving as its top markets for finished vehicles.

Jennifer Safavian, CEO of the trade organization Autos Driving America, emphasized that manufacturers are desperate for stability and consistency. The industry is still feeling the ripple effects of last year’s tariff-heavy climate, where the U.S. imposed 25% import tariffs on vehicles and parts from Canada and Mexico, alongside 50% duties on raw materials like steel, aluminum, and copper. Safavian noted that the industry shouldered an estimated $35 billion in tariff-related costs last year, a financial burden she described as unsustainable.

Because automotive supply chains often move parts across borders multiple times during the assembly process, each crossing carries the risk of new costs. "It takes five to seven years to plan future models and investments," Safavian explained. "That makes it very important to have that certainty. This is already the most stringent trade agreement. They would like to make sure it’s not made even more stringent, and that they’re given time to adjust to any changes."

The Global Competitive Landscape

The industry is also grappling with the rapid rise of Chinese-manufactured vehicles, which are reaching the global market with significantly faster development cycles. Industry leaders, including Toyota CEO Koji Sato, have expressed grave concerns about the competitive pressure, stating, "Unless things change, we will not survive."

Ron Davis, president of the Alabama Automotive Manufacturers Association, echoed the call for minimal disruption in current trade agreements. "They don’t want to do any radical changes to it," Davis said. "They want stability and predictability in any agreement that affects our industry. The automotive industry is very important to Alabama."

However, the geopolitical landscape remains complex. Reports from last week indicated that proposed bipartisan legislation aimed at restricting Chinese influence could potentially shut companies like Mercedes-Benz out of the U.S. market. Addressing the broader threat of foreign market dominance, Davis added, "We don’t want China to come in and take over our industry."