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

Automakers are navigating a period of intense turbulence. Between the rapid rise of Chinese-manufactured vehicles, cooling consumer interest in electric models, and the ongoing pressure of high costs, the industry is searching for firmer ground.

Seeking Stability in Trade

Representatives from Alabama’s automotive sector, joined by state and federal officials, gathered Monday at Birmingham’s Innovation Depot to address these mounting challenges. A central focus of the discussion was the potential renegotiation of the US-Mexico-Canada trade agreement. With Alabama ranking as the second-largest auto exporter in the nation, the stability of trade relations with Canada and Mexico is vital to the state's economic health.

Jennifer Safavian, CEO of Autos Driving America, emphasized that automakers are looking for consistency and certainty. The industry was rattled last year by a wave of tariffs, including a 25% levy on vehicles and parts from Canada and Mexico, alongside 50% duties on steel, aluminum, and copper. Because automotive components frequently cross borders multiple times during production, these tariffs hit manufacturers repeatedly.

"It takes five to seven years to plan future models and investments," Safavian noted, adding that the auto industry collectively absorbed roughly $35 billion in tariff-related costs last year. "It’s unsustainable (for automakers) to keep eating these tariff costs. We advocate they lower the tariffs on Mexico and Canada."

A Competitive Landscape

Ron Davis, president of the Alabama Automotive Manufacturers Association, echoed the call for minimal disruptions to the current trade framework. "They want stability and predictability in any agreement that affects our industry. The automotive industry is very important to Alabama," Davis said.

Beyond trade policy, the industry is grappling with the competitive speed of Chinese automakers, who are outpacing traditional rivals in moving from design to mass production. Companies are concerned about the pressure this puts on global market share, with Toyota CEO Koji Sato warning, "Unless things change, we will not survive."

Legislative efforts aimed at restricting Chinese influence are also sparking concern. Reports suggest that proposed bipartisan legislation could inadvertently create hurdles for companies like Mercedes-Benz by aiming to restrict China. While industry leaders remain wary of the threat posed by Chinese competitors, they are calling for nuanced policy that protects domestic production without destabilizing the broader market.