The Trump administration’s move on trade policy to impose tariffs on steel and aluminum imported from Canada, Mexico and the European Union has gained staunch opposition from some players in the automotive industry.

Made effective Friday, President Trump has decided to no longer suspend tariffs on steel or aluminum imports from Canada, Mexico and EU countries, but instead impose a 25-percent tariff on steel and another 10-percent tariff on aluminum from those allies.

While the Trump administration says the newly imposed tariffs will strengthen national security, some critics of the trade policy move that has already garnered responses from Canada and Mexico cite concerns about added production costs that can be passed down to car buyers in the near future. 

The Trump administration launched an investigation into metal imports to determine whether they threaten to impair the national security of the U.S. earlier this year. Trump accepted recommendations from the Department of Commerce in early March, which suggested that the country would be unable to meet the demand for national defense and critical infrastructure in a national emergency, according to The White House website.

Section 232 of the Trade Expansion Act of 1962 allows the Commerce Department to determine the impact of imports or any article on U.S. national security.

A statement from the White House in late May also explained that before Trump's latest move on trade policy, there had only been tariffs in effect designed to protect the U.S. from imports of steel and aluminum from Argentina, Brazil and Australia. Two proclamations approving Section 232 tariff modifications just signed by the President last month address the need for the same measures when it comes to metal imports from Mexico, Canada and the EU, the White House said. 

Moreover, CNBC recently covered news from Germany that Trump has had the automotive industry on his mind this year, particularly Mercedes-Benz, a division of the German company Daimler AG.

According to a recent report from a German-based magazine on Wednesday, CNBC reported Thursday, similar to how Trump asked his administration to investigate steel and aluminum imports, it appears that the President may also be interested in seeing if German car imports — specifically Mercedes-Benz models —  endanger U.S. security.

WirtschaftsWoche’s Silke Wettach reports that Trump told French president Emmanuel Macron that he would continue his recent trade policy moves until he stops seeing Mercedes-Benz models driven on New York City’s Fifth Avenue, according to several unnamed U.S. and European diplomats.

Industry players react

The American International Automobile Dealers Association has opposed Trump's plan to proceed with the added tariff on aluminum and steel imports from Canada, Mexico and the EU that came into effect Friday.

In a news release, AIADA head Cody Lusk explained that the added tariffs put in place by the Trump administration will impact industry relationships with key trading partners.

He said, “Since the administration's initial announcement earlier this year regarding steel and aluminum tariffs, prices have risen on key products.”

Lusk holds that imposing tariffs on Canada, Mexico and the EU facilities a trade war that impacts automaker relationships around the world and can hurt car buyers the most.

“Imposing tariffs on Canada, Mexico and the EU means American consumers will continue to bear the brunt of a trade war with our key economic partners,” said Lusk.

“The decision to forge ahead with these steel and aluminum tariffs will adversely impact the price of consumer goods, including the millions of new vehicles Americans buy each year,” he explained.

Similarly, Edmunds’ manager of industry analysis Jeremy Acevedo suggested the approved steel and aluminum tariffs for Canada, Mexico and the EU could be detrimental to the industry.

In a statement from Edmunds in late May, Acevedo said that the recent tariff moves will come to “represent a lose-lose situation for automakers and consumers alike. The implementation of these tariffs would be a major blow to the entire automotive industry.”

Acevedo explained how U.S. automakers have grown to rely on producing vehicles outside of the county.

“The vast majority of manufacturers produce at least some models abroad, and the build-out of these production factories cannot easily or cheaply be moved across borders,” he said. “Automakers will have to contend with a significant hit to their bottom line at a time when the market is already more competitive than ever.”

In a statement from the organization, American Automotive Policy Council president Matt Blunt said: “The imposition of tariffs on our trading partners in the EU, Canada and Mexico will undermine the global competitiveness of the US auto industry and invites retaliation from our trading partners. 

“While we fully understand the desire to take action against nations whose unfair trade practices have led to global overcapacities in steel and aluminum, we would urge the administration to continue to negotiate with close trading partners and allies such as the EU, Canada and Mexico,” said Blunt, who is the former governor of Missouri.

AAPC represents public policy interests of members FCA US, Ford and General Motors.

Tariffs could erode consumer confidence

Despite the negative analysis, the Trump administration says the newly imposed tariffs could have a positive impact on American jobs.

Like Lusk, Acevedo said tariffs could actually cause vehicle prices to rise because manufacturers can pass on any added cost stemming from the 25-percent and 10-percent tariffs down to the consumer.

Acevedo said, “These tariffs could ultimately result in much higher vehicle costs for consumers. If foreign manufacturers pass the 25-percent import tax on to car buyers, then those who manufacture vehicles here can in theory charge that much more for their vehicles and still be price competitive.”

Additionally, he went on to explain that vehicle purchase price increases could also augment consumer confidence in car sales, which has seen growth in recent years.

“This could erode the consumer confidence that has kept car sales at near-record highs the last few years despite rising transaction prices and fuel costs, which holds longer-lasting implications on the US economy,” Acevedo said.

“Consumers may opt to delay their vehicle purchases until this administration is no longer in office or simply purchase a used imported vehicle as there is a flood of off-lease vehicles hitting the market,” he went on to explain.

What consumers know about where their vehicle is built

A majority of U.S. car shoppers say that the country where their vehicle is built doesn’t matter to them, according to a recent study released by Autolist.com in May.

When asked about the country where their vehicle is built, while 39 percent of survey respondents said that it did matter where their vehicle was built, sixty-one percent of consumers said that the country where a vehicle was built isn't important to them.

In the case of vehicle production outside of the U.S., countries Canada, Mexico, and especially China, are attractive to automakers, according to Autolist.

“China has become a top assembly location for automakers because of its both lucrative and sizable auto market that makes it financially advantageous to import some of those vehicles to the U.S. market,” said Autolist in a news release announcing its survey results.

In the news release, Autolist.com specifically points to news from last year about how Ford now has plans to build its next-generation Focus compact model in China rather than Mexico. Along with how both General Motors’ Buick and Cadillac brands import vehicles built in China to the U.S. market.

Forty-nine percent of car shoppers in Autolist’s survey said a vehicle’s assembly in China would have no impact whatsoever on their decision to buy. While 30 percent of respondents said it would have some impact on their decision, and 21 percent said they were unsure about the impact on their decision to buy.

After asking the 1,264 car shoppers it surveyed how much they care about a vehicle’s country of assembly, Autolist found that among several issues they’ve raised, vehicle build quality is their No.1 concern, followed by U.S. jobs and reliability.

Twenty-six percent of respondents said that build quality is their top concern.

Below is a list of the top three issues that consumers cited, as well as the percentage of how many participants told Autolist that build quality, U.S. jobs and reliability are what they are concerned about most:

1. Build quality, 26 percent
2. Impact on U.S. jobs, 20 percent
3. Reliability, 14 percent

Furthermore, when it comes to having awareness about Chinese-sourced vehicles, among U.S. market consumers, knowledge of them is just about evenly divided Autolist found.

Fifty-one percent of survey respondents asserted that they are familiar with Chinese-sourcing by brands like Volvo, GM and Ford, 49 percent of consumers said that they are unaware of this.

While most of the consumers in the survey said it doesn't matter if their vehicle is produced outside the country and almost 50 percent aren’t familiar at all, consumers might see things in a different way if they find themselves paying more for imported vehicles.

Editor's Note: Story has been edited for clarity. Stay tuned for continued coverage and more industry reaction.