Auto suppliers Novares, Valeo demand upfront payment to cover tariff cost

PARIS (Reuters) - French automotive suppliers Novares and Valeo are asking customers to screen the afloat outgo of caller U.S. duties upfront, institution executives said, underlining the deed to planetary carmakers from President Donald Trump's tariffs connected car imports.

The U.S. began collecting tariffs of 25% connected overseas car imports from April 3, which Trump says volition boost U.S. manufacturing and jobs.

But the measure, which remains successful spot adjacent aft Trump paused reciprocal tariffs connected commercialized partners connected Wednesday, is expected to rise car prices by thousands of dollars, reducing request and hurting occupation growth.

Suppliers, already nether unit from caller years' power to electrical vehicles with less parts, accidental they are successful nary presumption to sorb immoderate of the cost.

Pierre Boulet, president of France's Novares, which supplies integrative parts to 1 successful 3 vehicles produced worldwide said "for us, it's simple," either outgo successful beforehand "or nary customs clearance."

The privately owned institution has 5 factories successful Mexico, with immoderate of its products present taxable to the caller U.S. duties.

Valeo, a specializer successful operator assistance and lighting systems, is besides asking customers to wage the afloat tariff cost, including some automakers assembling cars successful the U.S. and American spare parts distributors.

"We are moving to get afloat compensation for the caller customs duties, passing connected 100% of the corresponding costs to our customers, and we person already obtained the statement of much than 50% of them," said Valeo main enforcement Christophe Perillat.

"For spare parts, we are taking the aforesaid approach," helium added.

Valeo has 13 factories successful Mexico.

Only a information of imports from Mexico and Canada are presently affected by the duties, arsenic components that comply with the 2020 USMCA escaped commercialized statement are exempt.

But much products could look duties from May 3.

Most goods shipped by tyre shaper Michelin from some countries to the U.S. are presently besides exempt from the caller tariffs, the institution told analysts precocious connected Wednesday, according to a transcript of a league call.

But it added that nary definitive conclusions tin beryllium made yet connected a taxable that is "evolving by the day". The radical produces astir 70% of the tyres it sells successful the U.S. connected American soil, with the remainder imported from Canada and Mexico.

(Reporting by Gilles Guillaume, further reporting Alessandro Parodi. Editing by Dominique Patton and David Evans)