PARIS, April 10 (Reuters) - French automotive suppliers
Novares and Valeo are asking customers to cover the
full cost of new U.S. duties upfront, company executives said,
underlining the hit to global carmakers from President Donald
Trump's tariffs on car imports.
The U.S. began collecting tariffs of 25% on foreign auto
imports from April 3, which Trump says will boost U.S.
manufacturing and jobs.
But the measure, which remains in place even after Trump
paused reciprocal tariffs on trade partners on Wednesday, is
expected to raise car prices by thousands of dollars, reducing
demand and hurting job growth.
Suppliers, already under pressure from recent years' switch
to electric vehicles with fewer parts, say they are in no
position to absorb any of the cost.
Pierre Boulet, chairman of France's Novares, which supplies
plastic parts to one in three vehicles produced worldwide said
"for us, it's simple," either payment in advance "or no customs
clearance."
The privately owned company has five factories in Mexico,
with some of its products now subject to the new U.S. duties.
Valeo, a specialist in driver assistance and lighting
systems, is also asking customers to pay the full tariff cost,
including both automakers assembling cars in the U.S. and
American spare parts distributors.
"We are working to obtain full compensation for the new
customs duties, passing on 100% of the corresponding costs to
our customers, and we have already obtained the agreement of
more than 50% of them," said Valeo chief executive Christophe
Perillat.
"For spare parts, we are taking the same approach," he
added.
Valeo has 13 factories in Mexico.
Only a portion of imports from Mexico and Canada are
currently affected by the duties, as components that comply with
the 2020 USMCA free trade agreement are exempt.
But more products could face duties from May 3.
Most goods shipped by tyre maker Michelin from
both countries to the U.S. are currently also exempt from the
new tariffs, the company told analysts late on Wednesday,
according to a transcript of a conference call.
But it added that no definitive conclusions can be made yet
on a topic that is "evolving by the day". The group produces
around 70% of the tyres it sells in the U.S. on American soil,
with the remainder imported from Canada and Mexico.