In a direct appeal to President Donald J. Trump, the Specialty Equipment Market Association (SEMA), representing a key segment of the nation’s automotive aftermarket, has warned that escalating tariffs are threatening an industry responsible for an estimated $337 billion in annual economic activity.
In a letter sent to the White House, SEMA President and Chief Executive Mike Spagnola outlined the challenges facing American manufacturers in the wake of trade policies that have increased costs on imported materials and components. The association is calling for a formal transition period to allow domestic companies time to reestablish U.S.-based manufacturing operations, as well as economic relief in the form of tax incentives and targeted tariff exemptions.
“Our primary request is that American automotive parts manufacturers, including our members, be provided a transition period to re-shore their manufacturing, as well as some form of economic relief to assist in that transition,” Spagnola wrote. “That relief could include tariff exemptions for things like molds, tooling, and machinery brought back to the U.S., as well as tax incentives to offset the associated costs.”
The letter underscores the unintended consequences of current trade measures, highlighting barriers faced by businesses seeking to repatriate production. Among the most pressing concerns: the limited capacity and higher costs imposed by U.S.-based steel and aluminum suppliers—ironically, the very domestic producers that the administration’s tariffs were designed to bolster.
According to SEMA, the squeeze on manufacturers has made it more difficult for companies committed to producing American-made goods to remain competitive in a global market increasingly shaped by supply chain disruptions and shifting geopolitical dynamics.
The trade group’s message to the Trump Administration is clear: support for U.S. manufacturing must include not only protective measures but also proactive policies that enable the very businesses the tariffs are meant to defend.
The letter:
April 21, 2025
Dear President Trump,
On behalf of the Specialty Equipment Market Association (SEMA) and its more than 7,500 members that drive innovation in the specialty automotive aftermarket industry, we write to commend you and your administration for your commitment to restoring the greatness of American manufacturing.
We agree with you that U.S. manufacturing is critical to our nation’s economic prosperity and national security. The specialty automotive aftermarket industry is comprised of manufacturers, distributors, and retailers of specialty parts and accessories for motor vehicles. The industry supports over 1.3 million jobs across the U.S. and contributes nearly $337 billion to the American economy each year through the production, sale, and installation of performance, functional, restoration, and styling-enhancement products for use on passenger cars, trucks, SUVs, and special interest collector vehicles. The specialty automotive aftermarket is a true asset to the nation’s economy and proof of America’s manufacturing superiority and ingenuity, which is led by its small business entrepreneurs.
Your return to the White House has given significant hope to our industry, including the businesses that manufacture products to modify internal combustion engine vehicles, as well as those supporting customers who seek motorized access to federal lands for recreational purposes. SEMA and our members are steadfast in our belief that your Administration will deliver much-needed regulatory relief and support that will allow small businesses to thrive.
Because you’ve shown a commitment to the success of small businesses and our industry, I write to highlight several challenges that the specialty automotive aftermarket industry faces because of tariffs on auto parts, steel/aluminum, and components imported from around the world, including China. It is our hope that you will continue to stand with our industry and businesses nationwide by providing the necessary support they require for continued success. Additionally, our industry needs long-term certainty that the investments our member businesses make to bring manufacturing to America is sustainable in the long term. This can be achieved through positive tax policy and regulatory reform.
Our primary request is that American automotive parts manufacturers, including our members, be provided a transition period to re-shore their manufacturing, as well as some form of economic relief to assist in that transition. That relief could include tariff exemptions for things like molds, tooling, and machinery brought back to the U.S., as well as tax incentives to offset the associated costs.
For example, one of our Louisiana-based manufacturers wants to bring their manufacturing operations back to the U.S. However, under the current tariff regime, their molds and tooling will be subject to tariffs. Further, the machinery this company needs is only made overseas, limiting their vendor options to those located in Germany and China. Given that one of the machines currently costs $600,000, tariffs will make it significantly more expensive; if sourced from China, the cost of that machine will more than double. This presents a significant hurdle in their re-shoring efforts and renders such options economically untenable. This company, as well as other SEMA members, have offered to share the financial models and specific plans with you and your team. They support your objectives but need a bridge to assist with the transition.
Because of their smaller margins and need to pay upfront for goods and services, small and medium-sized businesses are among the hardest hit by tariffs. The tariffs are exacerbating cash flow issues, delaying payments, and reducing capacity/inventory. Perhaps the greatest barrier they face is sudden, unpredictable changes to their supply chains.
While you have rightfully used tariffs to incentivize companies around the world to manufacture their products in America, they are resulting in unintended consequences for U.S. manufacturers in our industry. In fact, many domestic businesses that manufacture their products in the U.S. are being directly and indirectly impacted by the tariffs, which make it a challenge for these companies to remain profitable.
For example, our members face higher-priced raw materials when they source steel and aluminum from domestic producers, who have used the tariffs on their foreign competitors as a way to raise their own prices. Such price increases from domestic sources are especially hard on small manufacturers who follow Made in America standards and do not buy at volume levels that allow them to negotiate prices like large companies can.
For many specialty automotive businesses that manufacture their products in America, they are forced to source components used in their products from international suppliers, because there are no domestic manufacturers or none that will produce components in smaller volumes that meet their needs. For businesses in this position, they have no choice but to source components from abroad. We are hopeful that your efforts to expand American manufacturing will help to address this challenge, but our members are concerned about the tariffs they will face during the transition period, which many expect to take at least 18 months.
SEMA recently surveyed its members on the impact of tariffs to better understand their impact on industry businesses. While our members have traditionally been very supportive of you and your administration’s policies, the responses were overwhelmingly negative regarding the disruption caused by the tariffs. Industry businesses are fearful of the uncertainty they are creating for their customers, businesses, and employees; the tariffs’ impact on their sales; and their ability to maintain their workforce at previous levels. Some companies have already started to lay off American workers, while others have shared plans to do so without policy changes or significant relief.
As you and your administration chart tariff policy moving forward, SEMA asks that you consider the unique challenges that small automotive manufacturing businesses face, including in changing up their vendors and supply chain in a short amount of time, and look for ways to help ease this impact on them during this transitional period of reshoring manufacturing.
Thank you for your consideration of this request. I welcome the chance for SEMA to work with your administration to bring even more specialty automotive aftermarket jobs to America.
Sincerely,
Mike Spagnola
President and CEO
CC: The Honorable Scott Bessent, U.S. Treasury Secretary
The Honorable Howard Lutnick, U.S. Commerce Secretary