Most Manufacturers Wary on Reciprocal Tariffs; AAEI, EAA, Others Call for FTAs Instead

However, among 35 prominent industry groups and companies mostly in manufacturing, but also including service exports and logistics, only about a third asked for tariffs to protect their products, while two-third argued no tariffs should be imposed, or tariffs should be used cautiously.

Representatives from several sectors -- liquor, aerospace and information technology hardware -- said trade is already tariff-free in most or the most important markets, and that hiking tariffs in an effort to gain reciprocity will harm their exports.

A half-dozen of these prominent groups and companies noted that their exports have already been retaliated against, either in 2018, when Trump imposed steel and aluminum tariffs, or in the last month, when he used the International Emergency Economic Powers Act to impose tariffs on Canada, Mexico and China.

Only the steel industry, textile manufacturers, plywood manufacturers and personal protective equipment (PPE) manufacturers welcomed tariffs as helpful to their businesses. Most manufacturing interests said tariffs -- especially on Canada and Mexico -- would harm their firms.

And, although the Office of the U.S. Trade Representative asked commenters to quantify the costs of trading partners' harmful practices, only one of the manufacturers did so, though the Motion Picture Association and Consumer Technology Association listed some of the costs of digital services taxes, or DSTs. There were dozens of confidential submissions, so those may have quantified harms.

Here's a selection of some of the points made to USTR:

The Aerospace Industries Association, which represents small parts companies plus aircraft and engine manufacturers -- including Boeing, RTX and GE Aerospace -- is the largest exporter by value, with almost $136 billion exported in 2023.

The group said there are already no tariffs on aircraft, engines and related parts for trade among the EU, Canada, Japan, China, Taiwan, the U.K., and seven other countries, and that increased exports by more than 2000% since the plurilateral agreement was implemented 40 years ago. It said it has to have duty-free imports from Canada and Mexico to compete effectively with the European aerospace industry as well as Turkey, Morocco, India and China.

It asked that any tariff hikes spare tariff codes for U.S. government property returned to the U.S., 9801.00.11, and Department of Defense duty-free entry, 9808.00.3000. And it asked that two tariff preference programs be renewed.

Autos Drive America represents most foreign-nameplate automakers in the U.S., and noted it exported $24 billion worth of cars -- 762,000 -- in 2023. Its members employ more than 156,000 Americans, 65% in manufacturing jobs.

The group -- like five other of these prominent associations -- said negotiating comprehensive free trade agreements is a better way to achieve fair and reciprocal trade than hiking tariffs.

It also said that if USMCA is not honored, production at its plants will be disrupted. "This is true regardless of whether the target of the tariffs is in North America or elsewhere – automakers cannot shift their supply chains overnight, and cost increases will inevitably lead to some combination of higher consumer prices, fewer models offered to consumers and shut-down U.S. production lines, leading to potential job losses across the supply chain."

The group noted that many major trading partners have no tariffs on U.S. cars -- Japan, Mexico, Canada and South Korea -- but if a country does have higher tariffs "the approach to dealing with that situation is through negotiation, rather than putting U.S. jobs at risk by imposing tariffs that disrupt supply chains and invite retaliatory tariffs, putting U.S. automotive exports at risk."

The group, like a few others, argued against including value-added taxes as a trade barrier. "These are consumption taxes similar to U.S. sales taxes," it wrote.

Tesla was the only individual automaker that commented. It said it has more than 70,000 employees, and one of its cars has the highest U.S. content of any car made in America; two others are in the top 10.

Tesla noted that it's already been subject to retaliation due to past tariff actions, and that those actions increased manufacturing costs for Tesla, making its exports less competitive.

"USTR should investigate ways to avoid these pitfalls in future actions," it said, and asked it to remember there are components that must be imported.

"U.S. companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken," Tesla said.

The National Association of Manufacturers is the largest trade association for the sector that Trump says he's trying to help through this action. It noted that half of all imports are industrial inputs or capital equipment used to manufacture. It said it surveyed more than 500 manufacturers on what additional tariffs would mean. It said of those surveyed, 74% import from Canada or Mexico -- and 75% of those said they can't source domestic substitutes at comparable prices. More than 91% import inputs.

Almost 87% of small and medium businesses in the survey thought they'd need to hike prices to cover the tariff costs.

It noted that honoring FTAs is critical to maintaining export markets, and said that manufacturing exports made up almost 80% of the value of all goods exports in 2023.

It said there are many chemicals and minerals "that simply cannot be sourced in the U.S. There is no reason to maintain a tariff on inputs that are currently not available in the U.S., which the ITC can evaluate on an ongoing basis."

NAM called for "more effective approaches" than tariffs on China, though it said the non-market practices in China's state-owned enterprises do "distort global markets in key manufacturing sectors."

Rather than quantifying the cost to manufacturers of trade barriers, NAM chose to quantify the cost of tariffs on Canada and Mexico. It gave an example of a paint manufacturer with factories in four states. It said if flax seed, pigments, chlorine, nepheline syenite, zinc oxide, and titanium dioxide from either of those countries face tariffs, it would cost the company between $35 million and $40 million a year.

The Alliance for American Manufacturing, which is partially funded by industrial unions, complained that the U.S. accounts for 20% of global consumption, but only manufactures "about 11 percent of automobiles, 7 percent of lithium-ion batteries, 12 percent of semiconductors (down from 37 percent in less than a generation), and 4 percent of printed circuit boards. There are many other examples of greatly diminished capacity in critical industries such as machine tools, shipbuilding, and pharmaceuticals."

"Trade deficits are the clearest sign that imports have replaced domestic production throughout our supply chains at an alarming rate, leading to the loss of millions of good, middle-class jobs and devastating communities across our nation," the AAM said.

"The administration should hold all trading partners accountable for unfair trade, but that must not stop the United States from seeking commitments from its allies to confront China with similar policies that derisk global supply chains from China’s overcapacity, abhorrent forced labor regime, and other practices," the group wrote.

It asked the administration to end de minimis, and to expand USMCA rules of origin to cover semiconductors, metals and other materials, batteries and critical minerals, electronics, and other critical and emerging technologies.

The American Chemical Society represents a major exporting sector, and said it has been affected by many trade barriers, but said any tariff action should be thoughtfully designed.

"Develop a transparent and open process for any proposed duty increases based on evidence of unfair trade practices, including predatory import surges and subsidized overproduction," it recommended, along with instituting a robust exclusion process for tariffs on inputs and equipment not available in the U.S. and used to make chemical products.

It endorsed a sectoral FTA in chemicals, based on the USMCA rules of origin, "especially ... with our trusted trading partners such as Canada, Mexico, the European Union, the United Kingdom [and] Brazil."

Stanley Black & Decker, which employs 15,000 people in 30 locations, said it has gone from 40% of U.S. sales based on imports from China to 15% dependent on China -- which has increased dependence on Mexico. It asked that any FTA partners -- particularly Mexico -- be spared for FTA-complaint goods.

"We believe it is appropriate for trade policy to acknowledge the progress and the time it takes to move supply chains," the tool manufacturer said.

The Consumer Brands Association represents the largest manufacturing sector by employment, with 22 million workers.

It praised the 10% rate for energy from Canada and the USMCA-compliant carve-out as a "thoughtful approach of exempting or reducing tariffs for certain goods ... ."

"The Trump administration has already demonstrated an understanding that different domestic manufacturing sectors have different needs, so recognition of the need to source products otherwise unavailable in the U.S. to support domestic food, beverage, household, and personal care product production seems in line with the administration’s intent," the CBA wrote. It noted it cannot source cocoa, coffee, certain spices, bamboo fiber and some absorbent materials at scale in the U.S.

The CBA did complain of "legislative and regulatory barriers under the guise of purported health and safety benefits," that "can be a pretext to hinder market access." But it also referred to Canadian retailers removing American-made goods after the IEEPA tariffs on Canada as harming its companies' exports.

Diageo North America is a multinational alcoholic beverage company with 2,300 U.S. employees that manufactures vodka, rum and bourbon in the U.S., as well as in Canada, Mexico and Europe. It just announced a $415 million investment in Alabama to open a new factory. "Reciprocity largely exists such that remedial action addressing imbalances is unnecessary," it said.

It said that since 1997, there have been reciprocal zero tariffs on liquor between Canada, the EU, the U.S., the U.K. and Japan, and that between 1997 and 2018, American whiskey exports to the EU and the U.K. quintupled. (Retaliation in those markets came in 2018, in response to steel and aluminum tariffs.)

The American Iron and Steel Institute complained about either subsidies or currency manipulation or both for China, Japan, India, Brazil, Korea, Vietnam and Indonesia, and complained about countries' export tariffs or restrictions on nickel, coking coal, iron ore, steel scrap and other inputs.

"The unfair trade practices described in this submission distort global trade and international competition and harm the American steel industry. As the administration looks to restore fairness in U.S. trade relations and counter non-reciprocal trade arrangements, AISI recommends taking action to ensure that policies like the ones outlined above do not further harm American workers and industries alike," the group wrote.

Steelmaker Cleveland-Cliffs alleged that "the harm to the U.S. economy from Brazil’s unfair practices and non-reciprocal arrangements on steel alone is reasonably estimated to be at least $1.51 billion per year." It asked for at least 25% duties on pig iron from Brazil, 7201.10, 7201.20, and 7201.50.30, because it said those imports "exert downward pressure on U.S. prices for all steel products, making it harder for America’s blast furnace operators to obtain a fair rate of return."

The Aluminum Association, which represents companies that make 70% of aluminum and aluminum products made in North America, said "taking every possible action at the U.S. border against unfairly traded Chinese aluminum is the right strategy, as well as focusing on the risk of derivatives and the importance of including them in trade policies. More and more semi-finished products, including cans and automotive parts, enter the United States, and therefore only targeting aluminum does not completely address the issue."

But tariffs on Canadian aluminum are harmful, the group said, adding "that there are areas of improvement for aluminum trade with Mexico, but overall, the nation brings immense value to the U.S. market if fully complying with its trade commitments with the U.S. and under the United States-Mexico-Canada Agreement." It said that Mexico needs to launch an aluminum import monitoring system.

One China problem it identified is restricted exports on aluminum scrap, and the ability to pay above U.S.-market rates for U.S. scrap aluminum because of their subsidies and lower operating costs.

"To ensure parity and reciprocal treatment, the U.S. should explore export controls of scrap aluminum to China," the association suggested.

Norsk Hydro also pointed to China's aluminum scrap demand, and complained that tariffs on Canada and Mexico make scrap needed by U.S. aluminum producers more expensive. "Canada is our number one trading partner for energy, high purity aluminum and scrap, all critical to Hydro’s U.S. manufacturing across 17 states," and its aluminum products should be duty-free, the company argued.

It also pointed to nearly $1 billion U.S. investments over the last five years, including to expand in Kentucky and open a new facility in Michigan.

Century Aluminum, the 1,800-worker company that convinced Trump to put a 10% tariff on imported aluminum in 2018, complained that China, Australia, Bahrain, Brazil, Canada, India, Norway, Oman, Qatar, Russia and Saudi Arabia are providing significant subsidies to support their primary aluminum industries.

It asked that reciprocal tariffs not be linked to current tariff rates alone, "but rather the bound tariff rates, which represent the level to which tariffs could be raised under existing trade rules. Considering bound rates is important because not only can duties be raised to those levels at a moment’s notice, but they represent the level of tariff uncertainty that U.S. producers must bear -- which itself is a significant trade barrier. (Canada's bound is up to 6.8%)." It also asked that the new 25% tariffs on aluminum not be weakened.

Unlike most commenters, Century endorsed the idea that a value-added tax, or VAT, is discriminatory.

The Coalition of American Manufacturers of Mobile Access Equipment, which represents companies with about 11,200 workers that make scissor lifts, boom lifts and the like, complained about evasion of trade remedies and Section 301 tariffs for Chinese equipment exports, and the decision of Chinese companies to start exporting from Mexico, and to buy a California company. "The U.S. government should ensure that this Dingli/MEC acquisition is subjected to appropriate scrutiny," the coalition wrote.

It noted that the U.K. has a 4% tariff on U.S. mobile access equipment, and said that Chinese tariffs and VAT combination effectively creates a 32% tariff on American exports, therefore, "an immediate additional 32% tariff is warranted on Chinese mobile access equipment, including those entering under Harmonized Tariff Schedule subheadings 8427.10.40, 8427.10.80, 8427.20.40 and 8427.20.80."

The National Marine Manufacturers Association, which represents 1,300 manufacturers of boats, engines, marine accessories and boat trailers, called a Canadian luxury tax on boats worth more than $250,000 unfair, and said that it lost $100 million as a result.

Retaliatory tariffs on the EU and the U.K. over metal tariffs in 2018 led to $70 million in lost revenue, it said. If the EU brings those tariffs back, and doubles them to 50%, as promised, "U.S. workers will have fewer boats to produce at a time when our boat exports to the EU and UK remain below pre-2018 levels."

The American Kitchen Cabinet Alliance asked that USTR imposed tariffs on kitchen cabinets, bathroom vanities, and components of those products from China, Malaysia, Mexico, Thailand and Vietnam, saying all had unfair trade practices. It identified a 16% VAT in Mexico, 38% combined tariff and VAT in China, and 33% in Vietnam. It quoted emails from a company offering transshipment from countries subject to trade remedies, but claiming Malaysian origin.

It said that China accounts for about a quarter of the global trade deficit in these goods; Mexico, 14%; and Vietnam 10%.

It said between China, Mexico, Vietnam and Malaysia, there were nearly $6.5 billion in imports of kitchen cabinets from 2020 to 2024.

The American Forest and Paper Association quantified the European deforestation regulation as a potential $3.5 billion annual sales loss for its members, who employ more than 925,000, and account for 5% of U.S. manufacturing GDP.

The Coalition for Fair Trade in Hardwood asked the USTR to coordinate with Canada on tackling circumvention of dumped plywood from China through Vietnam or Indonesia. It also asked for a ban on Russian wood, or plywood made in third countries from Russian wood.

"Because the European Union and the United Kingdom have banned the importation of Russian wood, both directly and indirectly, the United States has become an even greater target for these goods," the group wrote.

The Consumer Technology Association said the IEEPA tariffs "indicates to us that the Administration’s true vision of reciprocity is higher tariff barriers for the United States and for all of our trading partners." The CTA opposes that, saying it will only harm U.S. exporters.

However, the CTA does approve of pressure on trading partners to maintain a moratorium on customs duties on electronic transmissions, and said Indonesia is violating the World Trade Organization agreement on that. It also likes that the administration is focused on digital services taxes, and listed 14 offending countries, including Canada, the U.K., Australia, Italy and France.

While the world's largest economies have tariff-free trade in IT, it said USTR should seek to lower tariffs on the products in India, Brazil, Indonesia, Nigeria and Pakistan through trade negotiations.

The Semiconductor Industry Association said almost all major countries have no tariffs on chips, and asked USTR to be deliberative and careful at each step of its investigation, and avoid actions "that could inadvertently harm our industry."

The Biotechnology Innovation Organization, which represents both biological pharmaceuticals and genetically modified crop technologies, addressed nonreciprocal practices in China, the European Union, Japan, Australia, Italy, Spain, Taiwan and South Korea.

But, it said, using tariffs to address them could hurt patients and businesses.

The American Medical Manufacturers Association asked the government not to impose broad, non-strategic tariffs, and said that tariffs on Canada, Mexico and the EU would have unintended consequences.

It asked that Section 301 tariffs on all face masks and medical gloves of HTS subheadings 6307.90, 4015.12 and 4015.19 be raised to a minimum of 100%, effective immediately, and asked that no de minimis shipments be allowed on Chinese goods.

The American Petroleum Institute said its industry has not faced tariffs, and that if tariffs are imposed on imports in the sector, there could be retaliation, "leading to severe consequences for American energy consumers."

Instead, it asks the administraton to focus on negotiating FTAs.

The Computer and Communications Industry Association said half of its members' sales come from abroad, and these companies face a "thicket of barriers" that threaten the tech sector's ability to thrive.

But, imposing retaliatory tariffs, even targeted ones to force changes to DSTs or other protectionist measures "invariably incurs costs and unintended consequences, including raising costs of inputs for both domestic manufacturing, services, and corresponding exports."

The CCIA did quantify the cost of barriers. It said Canada’s DST is expected to cost U.S. businesses up to $2.3 billion annually, and other DSTs combined cost $2 billion. The EU's digital regulations cost $430 million a year per large company, and compliance plus fines could top $22 billion. It said lost advertisement revenues in the EU could be almost $15 billion, lost subscriptions and cloud revenues could be $18 billion.

It said Australia's collection of revenue to support local news cost $140 million annually.

The Can Manufacturers Institute said the industry employs 28,000 in 33 states, Puerto Rico and American Samoa. Due to tin mill Section 232 tariffs, prices are the highest in the world, and the institute argued that it did nothing to support domestic production, as nine of 12 production lines closed since the tariffs were implemented. About 75% of tin mill is imported.

"These high prices are transferred from can maker to food producers and retailers and ultimately to consumers," the group said.

Although it complained about those tariffs, it asked for new duties on HTS codes 7310.21.0050, 7310.29.0050, 7310.29.0065, 7323.99.5060, 8309.90.0000 and 8309.90.0090, and for antidumping investigations on canned food from China and Thailand.

The Motion Picture Association of America noted that its industry has a $15.3 billion trade surplus, and exports $22.6 billion annually. Well over half of its member companies' revenue is earned abroad.

The group detailed local content rules, taxes on movie tickets, DSTs, VATs and/or weak intellectual property protections in each country that USTR specifically listed in the notice, but did not put a dollar figure on what those cost American firms in lost sales.

The Express Association of America,which represents DHL, FedEx and UPS, said those companies employ nearly 1 million in the U.S., with employment growth of 27% in the last five years.

"To be clear, reciprocity is an important goal in managing U.S. trade relations. However, cataloguing a long list of perceived unfair practices or irritants and attempting to convince our trade partners to change those polices by imposing non-strategic tariffs is unlikely to result in improved market access for U.S. products and services," the submission said, and argued for comprehensive FTA negotiations instead.

The American Association of Exporters and Importers said that existing Section 301 tariffs "have placed many importers, particularly small businesses, in an untenable position."

The group advocated for FTA talks with the U.K., India and Malaysia, and asked that the Generalized System of Preferences benefits program be restored.

If the U.S. works toward sectoral agreements, "we highly recommend including digital services, rare earth minerals, aerospace, and defense products."

"There is an opportunity to improve regulatory harmonization in customs, technology standards, export controls, investment screenings, and technical conformity" in Europe, AAEI argued, and said the transatlantic dialogue should continue, and the U.K. should have its own version.

It asked that regulatory alignment in customs be tackled in the USMCA review, and said that rule of origin should try to make sure Mexico isn't "nationalizing" Asian products.

The trade-skeptic think tank Rethink Trade argued that other countries' digital policies "that affect Big Tech interests due to their distortionary dominance should not be labelled discriminatory trade practices."

It also asked the administration to focus on products and economic sectors that are most important to national security and well-being, "and the countries and companies for which use of unfair trade practices poses the greatest harm to the U.S. national interest."

But it also questioned the whole premise of the effort. "We will never export our way out of the huge trade imbalance that has done considerable harm across the United States by targeting specific regulations or even tariffs in other countries so as to increase U.S. sales there." It noted that Japan has no tariffs on cars, but still only buys $3 billion worth of U.S. vehicles, while they sell us $54 billion.

"Effectively, we envision a two-tier global trading system with more favorable terms among countries agreeing not to employ various mercantilist tools; committing to maintain balanced trade; and adopting mechanisms to correct imbalances, such as temporary tariffs, capital controls, and/or currency value corrections," the group wrote.

The Association for Accessible Medicines argued that importing medicines and medicine inputs, including active pharmaceutical ingredients "does not harm or create costs to American workers, manufacturers, businesses, or any other U.S. interests."

It noted that in the first Trump term, they decided not to apply Section 301 tariffs to pharmaceuticals, even though the first proposal had suggested it, and said that philosophy should continue.

It said that, given that there are now 20% tariffs on Chinese drugs and chemicals, and China has, at most, 5% tariffs, it's the U.S. that is creating the barrier.

Tariffs will not make it more attractive to manufacture pharmaceuticals in the U.S., the group argued. But increased costs for drugs will cost the government dearly. It said the 20% tariffs on Chinese imports are estimated to increase the cost of drugs originating there by 10%.

"The United States is already the second largest exporter of pharmaceutical products in the world. U.S. exports of goods under Chapter 30 have consistently risen year-on-year, growing from $46.4 billion in 2020 to $71.3 billion in 2024. The United States also runs a surplus in trade of Chapter 30 goods with a number of major trading partners, including Canada, Mexico, China, and Japan," and even in the EU, where it imports more than it exports, U.S. export sales increased more than 36% in the last five years.