The showdown between the European Union and United States over auto tariffs reminds this viewer of Charles Bronson and Henry Fonda in Once Upon a Time in the West, and with good reason. Both players appear ready to reach for their Colt Single Action Army in a bid to do maximum damage to the other.
After the U.S. Commerce Department delivered a confidential report to the White House on Sunday, the EU is warning its trading partner that any tariffs imposed on European-built vehicles will be met with similar levies on American goods.
Have you heard about that other American automaker — the one that doesn’t callously ruin lives? This question, no doubt percolating inside the craniums of U.S. lawmakers and pundits, doesn’t need to be spoken to be heard.
What would normally be a simple announcement of a production increase at one plant and a decrease at two others took on a symbolic nature this week. Ford wants to build more large SUVs but requires fewer cars. Thanks to a quirk of geography, no layoffs are planned — something that can’t be said of GM’s scorched earth plan, right?
If you’re like this writer, seeing “may contain up to 10 percent ethanol” at the gas pump leaves you frowning, then reaching for the premium nozzle. It’s not just that 91 octane helps my tiny turbo run better — I don’t like paying through the nose (as I do for all grades) for slightly less energy by volume.
Should President Donald Trump move forward with reported changes to U.S. ethanol laws, you can expect to see more corn alcohol at your local gas station. And I don’t mean Jim Beam.
With Honda and General Motors teaming up on a self-driving car and GM’s Super Cruise getting the green light from Consumer Reports, it’s already been a busy week for automotive autonomy — and it’s only getting busier.
The U.S. Transportation Department plans to repudiate 10 locations previously outlined by the previous administration to serve as federally recognized proving grounds for self-driving vehicle tech. But don’t think for a second that this means the noose is tightening around the neck of autonomous testing. The Trump administration is preparing a new initiative that will lead to nationwide testing from just about anyone who can cobble together a vehicle with advanced driving aids.
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.
It will be a day or two too late by the time you read this, but: Happy Independence Day! It’s been a very long time since I felt compelled to cloak my appreciation of this country in the kind of irony frequently employed by my autojourno colleagues on Twitter and elsewhere, and I certainly won’t start now. The United States is far from perfect and I am afraid that some of the changes made here over the past fifty years have been profoundly negative in their effects, but it remains the proverbial city on the hill for many of the world’s citizens. As the song says, I’ve been around the world and I, I, I, I… haven’t seen any other place where middle-class families own property, start businesses, and create wealth like they do here.
While I certainly understand how many of my coastal friends and acquaintances no longer feel that the American Dream exists for them or for anyone else, I also feel compelled to note that we are doing just fine here in the Midwest. Where I live, four-year-old children play unsupervised outside and the police shake your hand in the street. Some time ago I accidentally left a $275,000 Ferrari out in front of my house overnight with the windows down, the keys on the center console, and my wallet next to them. Needless to say, nothing happened. I know that’s par for the course inside Mark Zuckerberg’s gates but my neighborhood consists mostly of stay-at-home moms and mid-five-figure household incomes. Come back to the real America, if you like, but leave your emotional support animals, your addiction to food-as-virtue, and your army of domestic staff behind you. Out here, people raise human children instead of “furbabies,” thoughtlessly consume GMO produce, and clean their own bathrooms. It’s considered character-building.
I know you won’t do it. Nobody is going to change sides. We are too deeply divided now into Blue And Red Tribes. We judge incoming information based on how well it conforms to our existing beliefs. Want an example? How about this: For over six decades, the automakers have been predicting that increased emissions, safety, and fuel-consumption standards would have a negative impact on the bottom line. The media alternately ignored and lampooned them for saying so. Now those same automakers say that Trump’s policies will have a similar impact and the media is treating it the way the Catholic Church once treated an ex cathedra pronouncement.
My response to that? It’s this…
Toyota’s not going silently into a potential future where tariffs are as prevalent as man buns and tattoos in a brewpub. In its submission to the U.S. Commerce Department, Toyota wants the government to know it’s a standout business, and that a tariff on imported automobiles and auto parts would backfire.
Even for vehicles built in the U.S., American buyers would face a steep price hike, Toyota claims. Care to fork over an additional $1,800 for a Kentucky-built Camry? Meanwhile, a Canadian supplier association representative warns of “carmageddon” if the tariffs come to pass.
Just in time for the weekend, an escalation in the ongoing trade wars has seen the Trump administration announce a 25 percent tariff on $50 billion worth of goods imported from China. These tariffs include automobiles. For its part, China retaliated by applying a further 25 percent tariff on a similar amount of American goods, including automobiles.
The move comes less than a month after China announced a plan that would lower import duties and eventually allow foreign automakers to set up shop without a joint Chinese partner. Of course, that was then, and this is now.
It’s been over a year since the National Highway Traffic Safety Administration had someone officially running the show. While plenty of political appointments have been held up by Senate approval, the NHTSA is one President Trump has neglected since taking office. Former General Electric executive Heidi King has been the Deputy Administrator since September, and will be the one Trump taps to assume overall leadership of the agency. It’s about time.
The NHTSA has to cope with the planned fuel efficiency changes, oversee the neverending Takata airbag recalls, and start doing some damage control with autonomous vehicle development. While the recall issues are likely to remain business as usual, the current administration has pursued lax standards for both autonomous safety and corporate efficiency rules — and both have seen growing opposition.
Entire states are already pushing back against the proposed fuel efficiency rollbacks and there have been two fatalities involving self-driving and semi-autonomous technology within the last month. Because of this, promoting King might be a wise choice. Her corporate ties have some people concerned she’ll go easy on businesses, but at least she already has some experience in dealing with the big issues.
The threat of new import tariffs has PSA Group worried about its plan to return to the United States. Following President Trump’s proposal to levy a 25-percent tax on steel imports and a 10-percent tariff on inbound aluminum, Europe balked at the suggestion, leading to further threats of a car tariff.
Right now, the U.S. levies a 2.5-percent tax on imported European vehicles, far less than Europe’s 10-percent tariff on vehicle travelling eastward across the Atlantic. There’s a 25-percent U.S. tariff on European vans and trucks, too, which explains why crates of Mercedes-Benz van components sail into the port of Charleston, South Carolina at regular intervals.
According to Trump, any European retaliation against the proposed metal tariffs — which seem all the more likely given yesterday’s resignation of the president’s pro-free trade economic advisor, Gary Cohn — would see the U.S. ratchet up its car tariff. If the scenario comes to pass, your dreams of one day buying a new French car in America could easily be dashed.
As the U.S., Mexico, and Canada enter into the final day of the seventh round of NAFTA renegotiation talks, President Trump is offering his neighbors an incentive for signing a favorable deal.
“Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” Trump tweeted on Monday morning.
The president’s surprise announcement of tariffs on imported aluminum and steel late last week — 10 percent on the lighter metal, 25 percent on the heavier one — sent automaker stocks tumbling. Hoping to quell fears of new vehicle price increases, General Motors and Toyota released statements claiming the bulk of their aluminum and steel flies a red, white, and blue flag.
Officials from the United States and South Korea held a special session in Washington on Wednesday as part of U.S. Trade Representative Robert Lighthizer’s request to consider amending the two countries’ trade agreement. The joint talks serve to reassess the countries’ five-year pact, with the Trump administration aiming to diminish America’s growing trade deficit with South Korea.
One of the largest issues concerns the automotive industry. Korean rules stipulate a cap on the number of vehicles U.S. automakers can bring into the country each year that adhere to the country of origin’s safety standards. Presently, that quota sits at 25,000 vehicles per manufacturer. However, no U.S. company has ever made full use of the quota. General Motors, which is the most popular U.S. brand in South Korea, only sold 13,150 domestically built units in 2016.
Call it the Americanization of Mercedes-Benz. While the German automaker has assembled C-Class, GLE and GLS models in Alabama for some time (and, more recently, Sprinters in South Carolina), recent pressure from the Trump administration has led the automaker to reconsider what goes into those vehicles.
After being characterized by President Trump as “very bad,” it’s possible other German automakers operating in the U.S. could follow Mercedes’ lead in a bid to avoid further heat.
As the clock counts down to the beginning of talks aimed at revamping the North American Free Trade Agreement, automakers in Mexico, the U.S. and Canada know one thing they don’t want to see changed — rules of origin.
Auto manufacturers must abide by minimum regional (NAFTA-wide) content rules in order for vehicles to remain free from import tariffs. President Trump’s proposed reforms aim to benefit U.S. companies, but could lead to greater costs heaped onto automakers — something no profit-minded company desires.
Naturally, automakers wants their feelings known well before the three countries get down to brass tacks.
As automakers dial back sales projections in a year that’s seen a rough start, the industry could be holding out hope for a legislative solution to lagging demand.
Toyota North America CEO Jim Lentz made this claim during the opening of the company’s expanded Ann Arbor research and design center on Thursday, adding that incentivizing new vehicles to draw down bulging inventories can’t continue forever. In his view, automakers are keeping extra vehicles on hand for a reason, not just because production hasn’t adjusted for slow sales.
Lentz, like other auto executives, is hoping for a sales bump in the event the Trump administration green-lights its proposed $1 trillion infrastructure plan.