How Well Does Trump Understand What's Happening Within the Auto Industry?

President Donald Trump jumped on Twitter Sunday morning to rattle off a series of musings I couldn’t have cared less about. However, mixed in with the rest of them, was a reference to last month’s news that Ford abandoned its plans to import the Chinese-built Focus Active into the United States.

“‘Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs,'” Trump said in reference to a CNBC article from August. “This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!”

Whether or not you support the president, he has made a genuine effort to convince automakers to do their manufacturing within the United States. However, his comments on the matter make it seem as if he’s a tad confused on how things actually work. Perhaps we can attribute his statement to an unbridled optimism or a tongue-in-cheek jab at Ford. Otherwise, the only explanation is that he doesn’t have the best understanding of what’s happening with the industry — which would be mildly alarming.

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Ford Snatches Away the Focus Active, Leaving Future Low-end Buyers With the EcoSport and What Else?

U.S. Ford Focus production ended in May, but the automaker planned to import the next-generation Focus Active, a slightly lifted, mildly cladded five-door, in order to have something to sell to entry-level buyers. With the subcompact Fiesta ceasing production early next spring and the Fusion following it a couple of years later, that left very little low-end product for new or returning customers.

Well, scratch a crossoverized Focus off your shopping list. The automaker now says the Focus Active will not arrive on these shores in the latter part of 2019, or any date after that.

After learning this, how many of you are now pricing a three-cylinder, FWD EcoSport? Anyone? Hello?

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Trade War Watch: Trump Rejects Auto Tariff Deal With Europe

Earlier this year, President Donald Trump took a renewed interest in European tariffs after deciding he didn’t like what he saw. He argued it was time for the United States to consider a fresh tax on vehicles manufactured in the European Union to level the playing field. “If the EU wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a tax on their cars which freely pour into the U.S.,” he wrote in March.

A few months later, America floated the ridiculous-sounding proposal of abolishing all automotive tariffs between the U.S. and EU. Surprisingly, Europe was highly receptive. German Chancellor Angela Merkel even directly addressed the issue by saying she would support lowering EU tariffs on U.S. car imports. The European Union now seems willing to pursue a zero-tariff solution on automobiles.

However, Trump has since changed his tune. The new rhetoric coming from the White House is that the deal, which was originally pitched by the U.S., is no longer good enough.

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Eternal Underdog: Mitsubishi May Not Sell Enough Cars in the U.S. to Worry About Tariffs

While still an industrial giant on the global scene, Mitsubishi is a shadow of its former self in the United States. After leaning a bit too hard on its status as a value brand, annual deliveries went from about 346,000 units to just 58,000 between 2002 and 2012. Meaningful progress has been made since then, but the road to redemption has been a hard one.

The looming threat of tariffs isn’t making things any easier for Mitsubishi. The automaker doesn’t have a single production facility in the U.S., meaning it will receive the full force of whatever percentage is tacked onto the import fee. There is hope, however. Bizarrely, the brand’s biggest weakness (U.S. sales) is also its greatest strength when it comes to enduring import tariffs.

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Trade War Watch: American-Made Mercedes-Benz SUVs Held Up at Chinese Ports Over 'Safety Risk'

Mercedes-Benz sport-utility vehicles assembled in Tuscaloosa, Alabama, are being checked for potential problems by Chinese customs authorities in Shanghai, according to the nation’s media. The situation was later confirmed by Daimler AG on Thursday.

Officially, custom agents discovered the imported GLE and GLS models possess “insufficient” rear brakes and pose a safety risk. However, this isn’t China’s first time holding up product from the Tuscaloosa factory. Daimler confirmed that its American-made SUVs, along with vehicles from Ford, were held up for several weeks in late April.

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GM Places Gun Against the Head of the Chinese-made Buick Envision

We previously reported that General Motors was seeking an exemption from U.S. tariffs that could affect the domestic wellbeing of the Buick Envision, the brand’s Chinese-made utility vehicle positioned between the Encore and Enclave. At the time, GM hadn’t weighed in on if it would pull the model from the United States if it didn’t get a pass into the country.

Since then, General Motors President Dan Ammanm has said the exception is the only way the automaker sees itself being able to continue selling the model in America. The automaker confirmed that the Envision’s domestic sales are insufficient to rationalize U.S. production but noted GM needed the model to have a complete lineup against brands like Audi, Lexus, and Mercedes-Benz.

Mercedes-Benz… Seriously?

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Get Out of China Free Card: GM Wants the Buick Envision to Get a Pass on Import Tariffs

General Motors wants an exemption from a 25 percent U.S. tariff for the Buick Envision, the Chinese-made sport utility positioned between the Encore and Enclave. On Thursday, the automaker said it filed the request on July 30th with the U.S. Trade Representative to exclude the model from the prospective Section 301 tariff on products shipped from China.

The Envision hasn’t been a strong seller in the United States. While it managed to move 41,040 units in 2017, this year is not on track to meet that number. Obviously, the model has had some troubles. Early reviews were unfavorable, often accusing the Envision of being a faux luxury vehicle with an overly ambitious price tag. However, the manufacturer has since dropped the price and updated the vehicle for the 2019 model year.

Unfortunately, enough damage was dealt in those first two years to make the new model look less appetizing to customers. It now holds the stigma of an overpriced, Chinese-made compact crossover that falls short just about everywhere. It needs time to rebuild its image after the refresh, and it won’t be able to manage that if it is taxed into oblivion.

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BMW Raising Prices on American-made SUVs in China, Willing to Absorb Some Tariff Costs

BMW says it will hike the price of two utility vehicles in China to cope with the additional cost of tariffs on U.S. car imports in the world’s biggest vehicle market. The models are the X5 and X6, both manufactured in South Carolina.

This news comes after China increased import duties on all automobiles from the United States to 40 percent earlier this month. China had previously said it would reduce its already high vehicle tariffs across the board as a sign of good faith — which it did, while simultaneously slapping new punitive tariffs on the U.S. Meanwhile, President Donald Trump has postponed prospective automotive tariffs while negotiations take place with Europe.

If you needed proof that a trade war is on and were wondering how automakers would handle it, look no further. BMW says it will have to raise the models’ Chinese MSRP by 4 percent to 7 percent. It’s a relatively modest increase considering how utterly massive the new import fees are, which indicates a willingness from the automaker to absorb some of the associated costs just to remain in the market. It’s something BMW is not alone in doing, and there could be a valuable lesson to be learned from that.

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In a Worse-case Trade Scenario, Buick's Fate Hinges on a Tiny Crossover

The second quarter of 2018 returned pleasing sales figures for General Motors, but there were no champagne corks popping over Buick’s performance. While GM’s sales rose 4.6 percent compared to Q2 2017 (and 4.2 percent year-to-date), Buick sales headed in the opposite direction — down 12 percent in the quarter, and roughly six-tenths of one percent over the first half of the year.

Swirling menacingly in the background of all of this is a threat from President Trump to levy a 25 percent tariff on all automotive imports, a move that would leave Buick especially exposed. As numbers crunched by Automotive News show, the only thing sparing the brand from an emergency overhaul, should such a scenario come to pass, is a subcompact crossover — one which may or may not be exempt from the proposed tariffs.

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PSA Really Wants to Get You Into a Peugeot or Citron, but U.S. Fans Had Best Cross Their Fingers

PSA Group has a North American headquarters in Atlanta and it wants to use it. The French automaker also has a reentry plan that’s already underway. By the middle of the coming decade, we could all be behind the wheel of a French car (presumably after trading our Dodge Grand Caravans for the Citroën SpaceTourer Rip Curl).

Well, that might not happen — not if the U.S. imposes tariffs on the European Union, anyway. PSA North America Larry Dominique seems pretty worried that President Trump’s eagerness for tariffs could kibosh the company’s return, leaving mournful American francophiles gazing lustily over the Canadian border as PSA goes wild in Quebec.

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Trade War Watch: As Commerce Secretary Ponders Auto Tariffs During D.C. Hearing, Automakers Call Out the Troops

As the United States considers imposing new tariffs of up to 25 percent on imported automobiles and parts, the industry has rallied together to stand against the proposal. Manufacturers already made individual cases for themselves and are now dropping very bleak-sounding industry projections on the U.S. Commerce Department in the hopes of changing the administration’s mind.

However, President Donald Trump continues to promote the imposition of tariffs to force a sort of economic justice. For years, China’s protectionist policies regarding automobiles forced American manufacturers to build inside its borders and partner with Chinese firms for years. That’s something Trump claims could be a national security risk. China also recently upped its tax on American-made autos to 40 percent, shortly after promising to lower them. Meanwhile, Europe still holds a consistently higher tariffs on imported cars than the U.S., except for light trucks.

Commerce Secretary Wilbur Ross seems aware that China may have gamed the system in its favor, but appears less convinced that it’s a matter of national security. On Thursday, during a hearing on the probe into the industry, he said it was “too early” to say what the United States would do. Meanwhile, auto groups continue to make their terrifying case. (There’s also quite a bit of rolling PR in downtown D.C. today, as you’ll see below.)

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New Import Duties Could Body Slam Subaru

Subaru is a once-tiny manufacturer that grew in leaps and bounds thanks to high demand from the United States. The automaker is the eighth best-selling brand in the region, despite being a scrappy upstart, and has managed multiply its volume many since the 1990s. But, like any business loaded into a cannon with the word “success” emblazoned on the side, it can’t continue streaming through the clouds indefinitely without encountering some turbulence.

Subaru may be in for troubled times.

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Feds to Big Auto: Spill It

The U.S. Commerce Department wants automakers to whisper in its ear. And by whisper, we mean fill out a 34-page questionnaire detailing all their secrets — the nitty gritty of product planning, suppliers, and finances not already disclosed in public filings — under threat of financial penalty or imprisonment.

As one would assume, this latest chapter in the Commerce Department’s investigation into the possibility that imported autos pose a national security threat to the U.S. isn’t going over well.

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Trade War Watch: Trump's Not Letting Up on Europe's 10 Percent Solution

The past week has seen a flurry of trade trade announcements — none of them particularly promising for the United States. After a brief moment where President Donald Trump’s tariff threats seemed to have a positive impact on the European Union, Germany threw new support behind China as the People’s Republic issued a stunningly large 40-percent retaliatory tax on vehicles imported from America.

While Europe and the U.S. still might work out a zero tariff deal on automobiles, the recent activity has led Trump to respond with another warning. He now claims if the region cannot engage in fair trading practices with the United States, he’ll further restrict imported cars.

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Trade War Watch: Germany and China Now Best Friends

China and Germany signed a collection of commercial accords valued at $23.5 billion this week. Meanwhile, the nations’ leaders publicly affirmed their commitment to a multilateral global trade order, while the United States adopts a more protectionist policy.

“We both want to sustain the system of World Trade Organization rules,” German Chancellor Angela Merkel said during a press conference. Chinese Premier Li Keqiang, also present, agreed and stated protectionism must be prevented for the good of the global economy.

Chinese President Xi Jinping has already pleaded for governments to maintain an open trading policy. “We reject selfish, shortsighted, closed, narrow policies, [we] uphold World Trade Organisation rules, support a multi-lateral trade system, and building an open world economy,” Xi said in an incredibly hypocritical speech from last month.

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  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?