NEW YORK (BLOOOMBERG) -- The Metropolitan Transportation Authority wants the Trump administration to exempt New York City’s purchases of new subway cars and buses from tariffs to avoid $1 billion in added fees on the nation’s biggest transit system.
The state-run MTA plans to invest $23 billion over the next few years to purchase nearly 9,000 subway cars and commuter coaches and about 5,800 buses as the agency overhauls its decades-old trains and buses. But the White House’s sweeping tariffs threaten to add $1 billion in potential levies and force the agency to scale back needed upgrades, according to an agency presentation Wednesday.
The MTA needs to upgrade nearly 2,000 subway cars that were purchased in the 1980s as older railcars break down more frequently. About 40% of its bus fleet will be up for replacement in the next few years. LIRR coaches and locomotives are also nearing the end of their useful life.
An estimated $1 billion of additional expenses redirected away from tariffs could replace most of Metro-North Railroad’s train cars, or buy 150 Long Island Rail Road coaches, or 1,000 new buses or 280 subway cars, according to the transit authority.
The MTA faces an uphill battle with the Trump administration as the White House has been critical of how mass-transit agencies handle crime on their systems as well as initiatives to contract with minority-owned businesses. President Donald Trump has tried to stop federal funds from going to major projects like expanding New York City’s Second Avenue subway and a new passenger rail tunnel under the Hudson River for Amtrak and New Jersey Transit trains.
If transit agencies use federal funds to help buy new trains and buses, 70% of their parts must be made in the US and also assembled domestically. For some new vehicles, up to 30% of their components come from outside the US. The recent tariffs on steel, aluminum, copper and other materials are pushing up prices on those foreign-made parts, including vehicle frame parts, electronics and controls and seat frames.
Earlier this month, US transit officials met with US Secretary Sean Duffy in Washington to discuss the high tariff costs they’re facing, according to Janno Lieber, the MTA’s chief executive officer.
“The tariffs are killing us,” Lieber said during a Citizens Budget Commission event in midtown Manhattan last week. “The components that they have to buy through the manufacturing in the US, we tariff them like crazy now, thanks to Washington. So the result is federal dollars that go into buying rail cars deliver fewer jobs and fewer rail cars.”
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