Update on Tariffs, Race and Performance Legislation
The auto industry is holding it’s breath right now, between tariff wars and EV mandates. Who will come out ahead as politicians debate and the administration wields the threats of tariffs like a weapon? RacingJunk is here to bring you the latest in legislation that effects manufacturers, shops, small businesses and grassroots racers. One of the staunch advocates for the industry, both as supporters and lobbyists is SEMA and the organization has been active in campaigning on behalf of the aftermarket for business big and small.
Auto Industry Related Tariffs
In the latest news, SEMA reports that “auto parts that comply with the United States-Mexico-Canada Agreement (USMCA) will now be exempt from the 25% tariffs in place for imported auto parts, effective May 3” according to the Trump administrations announcements. What this means is that parts from Canada and Mexico that meet the requirements (including coming from plants that pay their workers at least $16 an hour), will not be taxed and thus not pass that on to consumers. According to CNN, that makes most Canadian parts compliant but leaves parts from Mexico more in doubt. There are virtually no American vehicles made with 100% American-made parts these days, so even if the parts are not imported from China, it’s likely that there will be some additional cost from the tariffs.
In addition, the White house has said that it will refund American automakers 3.75% of price of the vehicle against their parts tariffs bill in the first year, reduced to 2.5% in the second year. Manufacturers like Ford have stated that they do not immediately intend to raise prices, but only time will tell. So, in theory, this means that consumers may not immediately see a price increase in American made cars, but repairs and servicing will rise regardless. And brands like Toyota will absolutely see ramifications (and in fact, already are) both from the tariffs. From SEMA, “The tariff reprieve comes as automakers face significant financial strain, with General Motors projecting a potential $5-billion cost from the broader tariff regime.”
EV Mandates and Further Legislation
Despite, or perhaps because, SEMA’s headquarters are in Southern California, the organization has been lobbying hard against the Golden State’s proposed EV legislation calling for a ban on new Internal Combustion Engine (ICE) powered vehicles. On May 1, 2025, the House of Representatives voted to overturn California’s Clean Air Act waiver for the state’s Advanced Clean Cars II policy. This will go onto the Senate for a vote. SEMA contends that the policy will devastate the auto industry and negatively effect consumers.
The Western Caucus Chairman, Doug LaMalfa praised the Congressional Review Act (CRA) resolution:
“Today’s vote is a big win for drivers, businesses, and consumers across the country. California’s extreme emissions mandates would have made cars and trucks more expensive and less available for everyone, not just in our state but nationwide.
Consumers would see massive increases in costs if they chose a non-electric vehicle, and availability of some models has already been severely restricted in California. By passing these resolutions, the House made it clear that we won’t let one state’s radical agenda dictate what Americans can drive. People deserve the freedom to choose the vehicles that work best for them—not to be forced into unaffordable electric vehicles that may not work for them. I was pleased to see the House stand up for commonsense to protect hardworking families from even higher costs. By passing this Congressional Review Act, California will not be allowed to make this type of rule without a complete change in federal law.”
SEMA holds a similar position and has stated repeatedly, “SEMA is not anti-EV; rather, it champions a technology-neutral approach that fosters innovation and ingenuity. The association will continue efforts to preserve Americans’ rights to vehicle choice and the automotive aftermarket industry’s ability to design, manufacture, and bring to market products that help solve the emissions challenge.”
SEMA is holding a rally for California residents on June 11 to further advocate for the auto industry: https://sema.quorum.us/campaign/115994/