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automotive  OPPORTUNITIES FOR THE U.S. AUTOMOTIVE SECTOR
 Trans-Pacific Partnership

U.S. Automotive Product Exporters Currently Face Barriers in New TPP Markets**


$2.4 Billion
in U.S. Automotive Product Exports to New TPP Markets in 2015


U.S. Auto Exports Face Tariffs in New TPP Markets up to 75%

An Estimated $22 Million in Duties are Levied on U.S. Automotive Exports Every Year


Importance of the U.S. Automotive Sector

943,000 U.S. Automotive Products Workers in 2015


Accounted for 10% of Total U.S. Manufacturing Production in 2014


$135.3 Billion
in U.S. Automotive Products Exports to the World in 2015


U.S. Automotive Products Exports to the World Grew by 78% between 2009-2015


64%
of Total U.S. Automotive Products Exports to the World in 2015 Went to the TPP Region

The Automotive Sector includes products such as motor vehicles, motorcycles, and auto parts such as vehicle engines, transmissions, and tires

Key Market Access Benefits

Japan will will remove non-tariff barriers that impede automotive exports

Malaysia will eliminate tariffs on 75.8% of U.S. automotive exports within 4 years

Vietnam will eliminate tariffs on 70.4% of U.S. automotive exports within 4 years

The United States secured a long phase out of its tariffs for cars and trucks from Japan

New TPP Partners are Significant Markets for
U.S. Automotive Products Exports

Japan $1.9 Billion
New Zealand $289 Million
Vietnam $131 Million
Malaysia $74 Million
Brunei $5 Million

U.S. Automotive Products Exports Currently Face
High Barriers in New TPP Markets...

tariff

...Which Will Be Eliminated Under TPP.

98.2% of U.S. Automotive Products Exports to New
TPP Markets will Enjoy Duty-Free Access Immediately
(Share of Exports by Tariff Elimination Basket)
Percentages rounded up to nearest whole number.


| | | |

Move the slider to see the percentage of goods that will become
duty-free over a certain amount of time

Opportunities for Selected Automotive Subsectors

Auto PartsAuto Parts

The United States exports nearly $1.3 billion in auto parts to new TPP markets each year. These exports face tariffs as high as 40% in Malaysia and 32% in Vietnam. At the same time, competing auto parts made in China face lower—or even zero—tariffs in Malaysia and Vietnam as a result of trade agreements China has with those countries. Under TPP, 98.1% of U.S. auto parts exports will be eligible for immediate duty-free treatment into the new TPP markets, and all remaining tariffs will be eliminated over time.

MotorcyclesMotorcycles

American high-quality motorcycles are in demand throughout the TPP region for their quality and craftsmanship. Yet, American-made motorcycles exports face prohibitive tariffs in new TPP markets: Vietnam applies tariffs as high as 75%, while Malaysia applies tariffs ranging up to 30%. Under TPP, U.S. motorcycles will see deep annual cuts to the tariffs before they are phased out entirely. These significant cuts to the tariffs, combined with the rising middle class in the Asia-Pacific region, will provide new export opportunities to America's motorcycle manufacturers.

Auto RemanufacturingRemanufacturing

The United States is the world's largest remanufacturer, and TPP contains additional benefits for American's competitive remanufacturing industry. Because remanufacturing is a complex, high-value, and labor-intensive production process, these commitments reduce the need for companies to import materials and components from outside the TPP region and incentivize domestic production, benefitting U.S. and other TPP workers. TPP ensures that recovered materials derived in the region and used in remanufactured goods count as TPP materials, allowing more goods to count as TPP originating.

• For more information on the HS lines included in this sector report, please see this document.

* TPP Countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru,
Singapore, the United States, and Vietnam

** New TPP Countries: Countries with which the United States currently does not have preferential
market access - Brunei, Japan, Malaysia, New Zealand, and Vietnam

For more information on the methods and calculations used, please see this guide.

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