White House to Automakers: Choose a Side in the Great Gas War

The Trump administration has long been at odds with California and a coalition of supportive states that hope to block the rollback of Obama-era fueling regulations the current Environmental Protection Agency deems “unsustainable.” The EPA also says it’s inconsistent with consumer behavior. But automakers have behaved somewhat erratically on the matter, forcing the president to request (by proxy) that they make up their minds and pick a side before a final decision is made.

While industry leaders previously backed the more stringent regulatory framework set in place by the former president, they quickly converged on Washington after Trump assumed office in 2017, requesting a softening of Corporate Average Fuel Economy standards. After blowback from California and environmental activists, automakers took a more measured approach, publicly stating that they support green initiatives and reducing their own carbon footprint — and suggesting that a national deal be reached that pleases all parties.

Fence-sitting time might be over.

Basically, automakers don’t want to have to sell to separate markets inside the United States. Manufacturers already have to contend with increasingly strict standards in other countries, so dividing the U.S. is a non-starter for them. While it was hoped that a compromise could be reached with California, things didn’t shake out that way. The White House now wants an answer.

Officially, neither the White House and Alliance of Automobile Manufacturers has said anything on the matter, but Bloomberg reports the Trump administration requested automakers make up their minds during a conference call last month. According to the report, the White House said they need to either support the administration’s plan to roll back regulations or fully endorse California’s stricter ones.

It was probably always going to be this way. Despite months of negotiations, neither side ever seemed particularly interested in finding shared ground on the issue. Most accounts of the meetups ended with representatives saying talks were ongoing … with little to indicate any real progress was being made.

“Despite the administration’s best efforts to reach a common-sense solution, it is time to acknowledge that [the California Air Resources Board] has failed to put forward a productive alternative,” the White House said last month.

Meanwhile, CARB spokesman Stanley Young claims the administration broke off communications prior to Christmas, “and never responded to our suggested areas of compromise — or offered any compromise proposal at all.”

From Bloomberg:

The request has added to industry anxiety about getting caught in a conflict between Trump and the nation’s biggest auto market, the people said. The president is also reviewing the findings of a Commerce Department inquiry into whether imported cars and parts threaten national security, which automakers worry could provide the basis for new tariffs.

The Trump administration in August recommend capping tailpipe carbon emissions standards and fuel economy requirements at 37 miles per gallon after 2020, instead of rising to roughly 47 mpg under rules adopted by the Obama administration.

The joint proposal by the EPA and the traffic safety administration also called for revoking California’s authority to set its own greenhouse standards for vehicles, a move that could lead to yet another legal battle between Washington and Sacramento.

It’s doubtful automakers will start weighing in. If they do, most are expected to cautiously endorse global standards to maintain an environmentally conscious image. How that will impact the Trump administration’s decision on how to handle the rollback is unclear. It’s assumed that the White House is primarily pressing for the regulatory reduction to appease companies that voiced concerns about their ability to cope with the existing standards. If they truly no longer care, there’s a chance the administration will abandon its deregulation goals and focus its remaining energy elsewhere — rather than become entangled in a prolonged legal battle with California.

However, that’s far from a definitive scenario. The White House has already placed quite a bit of muscle behind the rollback, having taken the position that research data proves the current standards are not in line with what consumers want or need.

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