U.S. President Donald Trump's focus on tariffs as an economic weapon is misguided, and the tariffs are likely to drive up the cost of raw materials used to manufacture auto parts, industry practitioners in Brazil said.
According to local media reports, the Brazilian Association of the Auto Parts Industry and the National Association of Brazilian Auto Parts Manufacturers have issued a statement expressing their concerns over the U.S. tariff policy.
At a factory that produces rearview mirrors in Sao Caetano do Sul, where several auto parts manufacturers are based, Iramaia, the manager of production planning and control, expressed her concern about U.S. President Donald Trump's tariff policy.
Iramaia said that the tariffs could lead to higher costs for raw materials, resulting in increased production costs for Brazilian companies.
"I believe this will have a significant impact, as the tariffs imposed by the U.S. will make products more expensive. For example, the imported materials we use here. I believe this will increase costs for Brazilian companies," said Iramaia.
Vice president of the National Association of Auto Parts Manufacturers Marcio Roberto Codogno criticized Trump's tariff policy. He believes that the policy is a mistake and will not achieve the desired results.
While short-term impacts on Brazilian auto parts businesses are expected, he suggests that in the long run, it may encourage Brazil and other markets to strengthen trade relationship with other countries.
"As for my views on Trump's tariff policy, I believe it is a misguided approach. It's as if he wants to take the U.S. back more than a century. Even if his intention is to reindustrialize the U.S., I don't think this possibility is very realistic. In fact, I believe the ones who are suffering the most are the American people," said Codogno.
Trump announced a 25 percent tariff on auto imports which took effect for vehicles on April 3, and tariffs on auto parts are set to start on May 3.
The tariffs are bad news for Brazil, which last year exported 1.37 billion U.S. dollars' worth of auto parts to the United States, accounting for 17.5 percent of Brazil's total auto parts exports.
Local media reports have warned the cost rise associated with the tariffs could potentially lead to U.S. sales plummeting by over 340 million U.S. dollars.
US tariff policy is misguided: auto industry practitioners in Brazil
US tariff policy is misguided: auto industry practitioners in Brazil
