US auto industry urges Trump not to tax factory robots

A group representing major US automakers has urged the Trump administration not to impose tariffs on robots and machinery used in factories, warning of the risk of rising production costs, delays and escalating new car prices, according to Reuters.

Call for no tax on robots in factories

The Alliance for Automotive Innovation (AAI), which represents General Motors (GM), Toyota, Volkswagen, Hyundai and many other manufacturers, asked the government not to issue new tariffs on robots and industrial equipment.

“Increased equipment costs at existing facilities will increase automakers’ overall production costs, potentially causing production delays and potentially leading to vehicle shortages and higher vehicle prices for U.S. consumers at a time when new vehicle prices are already at record highs,” AAI said in a commentary published on October 22.

Robots at the Mercedes factory. Photo: Apptronik

Security investigation 2/9 and scope of review

The call came after the US Department of Commerce opened a national security investigation on September 2, examining the risks of importing protective gear, medical supplies, robots and industrial machinery.

The investigation results could serve as a basis for raising import taxes on many products such as masks, syringes, infusion pumps, robots, computer-controlled mechanical systems and industrial stamping and pressing machines.

Risk of costs, shortage of vehicles and rising selling prices

Any new tax on manufacturing equipment would directly increase the investment and operating costs of the plant, according to AAI. With profit margins inherently dependent on scale, the increased costs could force companies to adjust production or prices, creating the risk of a shortage of vehicles in the market when supply slows down.

The coalition also proposed that if the government still imposes tariffs, robots used in manufacturing facilities located in the US should be exempted to limit the negative impact on domestic supply chains.

40% of robots are associated with the automotive industry

The coalition cites research that shows about 40% of all robots and industrial machinery installed in the US by 2024 will be in auto manufacturing facilities. This large proportion means any tariff changes are likely to have a significant impact on domestic auto production.

Tesla's stance, the NRF, and the international response

Tesla, while not joining AAI, also called for no tariffs, arguing that tariffs could undermine investment and delay new factory openings or upgrades.

The National Retail Federation (NRF) warned that tariffs and shortages would increase consumer costs and prices, noting that robots are increasingly being used in stores, warehouses and distribution centers.

Several foreign governments including China, Canada, Japan, Switzerland and the European Union have filed objections to the tariffs.

Background: 25% tax on imported pickup trucks

The campaign against the robot tax took place right after President Trump announced a 25% tax on imported medium and heavy-duty pickup trucks into the US from November 1.

Trump posted on Truth Social that GM and Ford executives thanked him for the new tariffs. Stellantis executives, meanwhile, reportedly had trouble sharing the excitement because many of the company’s medium- and heavy-duty pickup trucks are made in Mexico.

Next prospects

A final decision on tariffs on robots and machinery will depend on the conclusion of the Commerce Department’s investigation. Automakers and retailers have stressed the need to keep equipment costs at reasonable levels so as not to disrupt investment and expansion plans and the goal of stabilizing vehicle prices in the US market.

Responses from foreign businesses and governments show the spillover effects of tariff policies on the global supply chain of robots and industrial machinery, especially in automation-dependent industries such as automobiles.

Source: https://baonghean.vn/oto-my-keu-goi-ong-trump-khong-danh-thue-robot-nha-may-10309120.html