Expiring trade agreement cranks up pressure on automotive supply chains
The automotive sector has had a tough few years. And it could get a lot worse.
Automotive companies have been hit hard by the pandemic, chip shortages, and shifting customer preferences for EVs. Then there is the increasing complexity of vehicles themselves (ICE, EVs, and hybrids). Now, a looming deadline threatens to choke off vital supplies.
A new threat to automotive supply chains
The US-China tariff agreement (the Busan Rapprochement), which temporarily lowered tariffs and extended tariff exclusions, is set to expire in November 2026. As we know all too well, North American automotive and high-tech companies are heavily dependent on Chinese critical minerals and rare earths, as well as Taiwanese semiconductors. The ending of this agreement could very well lead to a renewed clampdown by China, threatening shortages, disrupting production, and driving up prices.
Automotive companies need to be ready for the worst-case scenario where no new agreement is...
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