Detroit Axle, a major U.S. aftermarket auto parts distributor, said a recent change to federal tariff policy threatens to shut down its operations and eliminate hundreds of jobs unless urgent relief is granted.
The Ferndale, MI-based company filed suit against the Trump administration in May after the end of the “de minimis” tariff exemption, which had allowed duty-free entry for imported goods valued under $800. Now facing a 72.5% tariff on shipments routed through its Juarez, Mexico facility, Detroit Axle said it may be forced to close its doors by the end of June.
“Detroit Axle’s situation is dire; it will likely be forced to shutter most or all of its business and lay off hundreds of employees if it does not receive relief by the end of June,” the company wrote in a June 7 filing to the U.S. Court of International Trade.
The company employs more than 500 people nationwide, including more than 230 in Michigan. Its inventory primarily consists of suspension, steering and brake components sold to both professional mechanics and DIY consumers across the country.
Detroit Axle argues the administration unlawfully ended the de minimis exemption without following proper rulemaking procedures. It also claims the increased tariffs are unsustainable, especially for its cost-conscious customer base.
“The company cannot absorb the massively increased costs from the 72.5% tariffs and cannot meaningfully raise prices,” attorneys for the company wrote. “So by the end of June, Detroit Axle will likely be forced to close its doors and lay off hundreds of employees in Michigan.”
Though the company has temporarily maintained operations using pre-tariff inventory, those supplies are dwindling. On June 5, the court denied a Justice Department request to pause the proceedings while broader legal challenges to Trump-era tariffs continue. The court ordered the government to respond to Detroit Axle’s request for relief by June 20, with a reply from the company due July 7.
Detroit Axle said this schedule may be too slow to prevent “destruction” of the business.
The Justice Department contends that Detroit Axle failed to demonstrate immediate harm, citing the company’s two-week delay in filing suit after the policy took effect.
