U.S. caps Taiwan auto parts tariffs at 15%
The U.S. Department of Commerce has issued a 15% tariff cap on Taiwanese auto parts, along with certain items such as timber, lumber, and wood-derived products, according to a notice filed in the Federal Register.
Aftermarket parts manufacturers could benefit from the retroactive cap, with a majority of CAPA participants listed on their website located in Taiwan.
The cap comes at a time when OEM suppliers are in distress due to multiple global factors, including tariffs. Plus, the United States-Mexico-Canada agreement is up for formal review in July. Mexico and Canada are major OEM auto parts producers for the U.S. market, according to the International Trade Administration.
Automotive Body Parts Association (ABPA) Executive Director Edward Salamy said in a press release that the recent decision to cap Section 232 tariffs on Taiwanese automotive parts is a positive development for the collision repair industry, automotive aftermarket, and consumers.
“The collision repair industry depends upon a healthy and competitive supply chain,” Salamy said. “This decision recognizes the importance of maintaining access to cost-effective automotive parts while supporting broader supply chain stability. As trade discussions continue to evolve, the ABPA will remain actively engaged and will continue advocating for policies that support competition, affordability, and consumer access to quality replacement parts.”
Taipei Times also reports that government officials in Taiwan are focusing on the benefits the tariff cap will have on auto parts manufacturers. It notes that the ministry says tariffs dropping from an average of 26.71% will help boost order momentum for auto parts made in Taiwan.
Market reaction reflected strong industry expectations, with “almost all related stocks hitting limit-up today,” according to Taiwan Minister of Economic Affairs Kung-hsin, as quoted in the article.
The tariff reduction would put Taiwan on equal footing with Japan, South Korea, and the EU, and further widen its advantages over China, the article states.
Geopolitical changes have increased the cost of OEM parts, while aftermarket parts have remained relatively stable, according to a recent report published by PartsTrader.
However, a recent Enlyte Envisions Trends 2026 Report found that aftermarket prices have increased by 3.89% in 2025 and 3.08% in 2024. Yet, OEM prices have increased at a higher rate than aftermarket parts, by 4.21% in 2025 and 3.52% in 2024.
Ryan Mandell, Mitchell International’s strategy and market intelligence vice president, said in March that aftermarket, recycled, and remanufactured parts were being used 1.5% more due to increased OEM parts costs.
That same month, the Automotive Aftermarket Product Expo (APPEX) released survey results showing that 6 in 10 aftermarket businesses expect demand for aftermarket parts to grow this year. Fifty-three percent of businesses surveyed said they are already seeing the demand for lower-cost parts and service grow.
The Taiwan tariff cap could further widen the gap between OEM and aftermarket parts costs, making the outcome of the United States-Mexico-Canada even more critical for automakers.
North American and European Tier 1 and Tier 2 suppliers have already cut more than 60,000 jobs due to EV production pullback and mounting tariff costs, according to an Automotive News tracker.
Tier 1 and Tier 2 suppliers told Automotive News during a fourth-quarter Auto Industry Confidence Index survey that 40% are pessimistic about the state of the auto industry.
Automotive News has also reported that one-fifth of the automotive supply base is under financial distress.
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