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To see how automotive companies are trying to keep up with increased U.S. tariffs on vehicles and auto parts, Premium Guard Inc .
is a good place to start. The company makes aftermarket auto products, including replacement fuel filters. It has facilities in Canada and Mexico.
PGI also has worked to diversify its supply chain. During the first administration of President Donald Trump, PGI moved to lessen its dependency on products from China. In that administration, China accounted for “65% of our supply chain,” PGI CEO Anan Bishara said in an interview.
“We have diversified over the last seven years.” PGI followed the 2024 U.S.
presidential campaign closely. When Trump was elected to a second term, “It was no surprise” that tariffs were coming, Bishara said. “President Trump made it clear tariffs were front and center of his policy.
” The company reduced its reliance on China to 25% to 30% while adding supply sources in other nations. PGI believed it was in a good position. Since taking office again, Trump has imposed widespread tariffs globally.
Last week, Trump announced a pause on many tariffs. However, tariffs of 25% on vehicles and auto parts remain in place, according to the Detroit Free Press . The auto tariffs include levies on Canada and Mexico, major trading partners of the United States.
Trump, in his first term reached a trade accord with both countries, known as USMCA. “We thought USMCA was here to stay,” Bishara said. “We thought Mexico was a safe haven.
” Not so much. With the new tariffs, “There’s a lot of complexity that was added,” the CEO said. “We need a legal team.
We need trade experts.” The company initially intended to respond quickly. But the complexity involved caused PGI to reconsider.
“We decided the best course of action was to stand back,” Bishara said. The executive said PGI couldn’t make major moves “until we have further clarity.” Over the long term, PGI has many factors to consider.
“We see the challenges our customers are going through,” Bishara said. The executive said PGI deals with “all the major players” in the auto industry. To boost production in the U.
S., companies have to invest in machinery and tooling, Bishara said. “It’s a long process.
..You can’t build a factory overnight.
” Bishara said PGI is “looking to expand domestic” production. But, he added, “Some products are labor intensive. Some products can be automated.
”.
