Global trade policies are designed to regulate trade with foreign countries, establish standards like tariffs and subsidies, and influence trade practices. These policies significantly impact the manufacturing industry, often affecting where manufacturing occurs due to varying costs and regulations.

All it takes is a brief glance at the headlines: global trade policies are ever-evolving, and market conditions are ever-changing. Manufacturers continue to face pressure from the ongoing trade shifts. And for long-term success, automotive manufacturers should have a comprehensive long-term strategy in place, which helps build resilience in the face of shifting trade landscapes.

Levels of Manufacturing and Labor Costs

International labor is frequently perceived as the most cost-effective option, which is why a substantial amount of manufacturing is outsourced to countries like China. However, labor costs can vary widely depending on the type of manufacturing.

High-level manufacturing, such as aerospace, semiconductors, and automotive, can often be more economical when done domestically due to the need for advanced skills and technologies. On the other hand, low-level manufacturing, like stamping or producing basic items such as paperclips, tends to be most cost-effective in countries with lower labor costs.

Mid-level manufacturing, which includes production requiring skilled labor, like automotive parts, often sees a mix of domestic and international production. For example, automotive parts manufacturing, a key area for companies like American Manufacturing, can sometimes be more economical in countries like Mexico, creating a competitive landscape for domestic manufacturers.

Current Trends: Electric Vehicle Manufacturing

One of the most visible impacts of global trade policies is seen in the electric vehicle (EV) market. China currently leads in manufacturing cost-effective electric vehicles, often using production facilities in Mexico. To remain competitive, some American automotive companies also source parts from international manufacturers.

Balancing competitiveness with domestic production presents challenges, especially as the industry navigates the complexities of meeting regulatory standards while managing production costs.

Navigating US Fuel Economy Standards

In 2022, the National Highway Traffic Safety Administration (NHTSA) set a rule requiring automotive companies to achieve a fleet average of 49 mpg by 2026. This goal has driven a push toward increasing the number of electric vehicles in the market. However, balancing the production and sale of electric vehicles with consumer demand remains a critical challenge.

Automotive companies are exploring various strategies to meet these standards, such as expanding hybrid and alternative fuel vehicle offerings. Navigating these requirements will continue to be a critical area of focus for the industry in the coming years.

Commitment to Innovation and Quality Control

At American Manufacturing, quality and innovation are at the heart of our operations. By investing in advanced technologies like robotic welding and precision laser cutting, we ensure that every part meets stringent quality standards. Our focus on continuous improvement drives us to explore new methods and materials, keeping us ahead in the competitive landscape of automotive parts manufacturing. We partner closely with clients to deliver tailored solutions that meet their specific needs, supporting their success in a dynamic market.

American Quality in Automotive Parts Manufacturing

At American Manufacturing, we know disruption and instability remains on the horizon. Yet, our commitment to those we serve remains unwavered. We are dedicated to supporting our customers through the evolving landscape of global trade and industry standards. As policies and market trends shift, automotive companies need reliable parts manufacturers who can provide the quality and innovation necessary to stay competitive.

Our partners find reliable, unbeatable quality with a company that takes innovation seriously, from the parts we make to the tools we use to make them! Contact us to learn why we’re a preferred choice for automotive parts manufacturing.