Auto Tariff Threats May Hit U.S. Consumers' Pockets

First Up 11/30/18

Auto Tariff Threats May Hit U.S. Consumers' Pockets
U.S. consumers may be getting ready to pay a little extra for their next car purchase as President Trump revs up threats of 25 percent tariffs on imported cars. On Thursday, AIADA President and CEO Cody Lusk told Fox Business’ Susan Li that GM failed to include in their restructuring announcement whether China’s unfair trade practices affected GM’s decision to cut 14,000 jobs over the next two years. “The president is the one that took that leap and that’s what has us very alarmed on that side of the industry,” he said during on Thursday. Japanese-made passenger vehicles imported to the U.S. totaled an estimated $40 billion in 2017 and German-made cars totaled $20 billion in the same year. Lusk estimates the American consumer will pay an average tax increase of about $7,000 per vehicle on a $35,000 average cost of a vehicle. “This is a big headwind for the U.S. consumer,” he said. Read more and watch AIADA President and CEO Cody Lusk on Fox Business discussing possible new tariffs by clicking here. 

Trump Signs NAFTA Replacement, But Hurdles Remain in Congress
The U.S., Canada, and Mexico signed a new trade deal championed by President Donald Trump to replace the quarter-century-old NAFTA pact, capping a year of intense negotiations and offering a glimmer of certainty amid rising global tensions over trade. Bloomberg reports that Trump, Canadian Prime Minister Justin Trudeau, and outgoing Mexican President Enrique Pena Nieto signed an authorization for the deal on Friday morning in Buenos Aires on the sidelines of the Group of 20 summit, with their ministers signing it shortly after. The vast majority of the pact still needs to be ratified by lawmakers in the three countries but the signing enacts a handful of immediate protections, such as from auto tariffs. Read more here. 

Opinion: Trump's GM Collision
The Wall Street Journal Editorial Board writes that President Trump believes he can command markets like King Canute thought he could the tides. But General Motors has again exposed the inability of any politician to arrest the changes in technology and consumer tastes roiling the auto industry. The main driver of GM’s failure a decade ago was its uncompetitive labor contracts. But the market tides still rolled in, and GM executives have learned that staying competitive is necessary to avoid another collapse. Mr. Trump and Democrats seem to believe that with the right mix of tariffs and managed trade they can return to a U.S. economy built on steel and autos. This is the logic behind the Administration stipulating in its new trade agreement with Mexico and Canada that 40 percent to 45 percent of a vehicle’s value must consist of parts made by workers earning at least $16 an hour. But an economy doesn’t run on nostalgia. Mr. Trump thinks his trade machinations can overrule the realities of the marketplace, but he’s as wrong as Barack Obama was about the climate and regulation. Fine with us if he wants to end subsidies for all car companies. But if he intervenes to make GM less competitive, Mr. Trump will merely hurt more workers. Read more here. 

Toyota Shakes Up Executive Ranks for Flexibility, Faster Decisions
Toyota is reorganizing its executive lineup to inject flexibility and faster decision making into its attempted transition from traditional automaker to new mobility provider, reports Automotive News. The changes will create a flatter, more diverse workforce as Toyota confronts the challenges of a rapidly changing automotive industry, CEO Akio Toyoda said in a news release Friday. The overhaul also aims to develop younger talent by giving junior managers a faster path to advancement. It dispenses with rungs in the traditional seniority-based ladder system. Talent and ability, not age or education, will be the decisive factor in career advancement, Toyoda said. As part of the change, Toyoda takes on a new title as chief branding officer. Former design chief Tokuo Fukuichi had previously held a similar role for the Lexus luxury brand. Toyoda will step up as the chief brand ambassador for both the Toyota and Lexus brands. Read more here. 

Jaguar, Honda Beat Tesla, Toyota for L.A.'s 'Green Car' Awards
The Jaguar I-Pace took away the first ever Luxury Green Car of the Year Award as the prestigious, 14th annual Green Car Awards announced their annual winners at the L.A. Auto Show, reports The Detroit News. Other winners include the Mitsubishi Outlander GT plug-in and the Honda Insight sedan. Presented by the Green Car Journal, the awards "honor the vehicle that raises the bar in environmental performance while remaining within reach of most consumers." With governments across the globe forcing an industry transition to zero-emissions electric cars, the awards have become important headliners for automakers. The I-Pace, Jaguar's first-ever electric car, scored an upset by beating out the Tesla Model 3, the most popular electric vehicle ever with more than 80,000 in sales this year and some 400,000 more on order. The I-Pace brings the British cat's stylish lines to the EV segment as well as 240-mile range and the performance brand's signature, taught performance. Read more here. 

Beltway Talk: A Conversation with John Bozzella, President & CEO of Global Automakers
John Bozzella, a veteran auto industry executive, has been the President and CEO of Global Automakers since 2014. In this latest episode of Beltway Talk, John sits down with AIADA's Hannah Oliver to discuss the challenges facing the auto industry in Washington, D.C., and the important work his association is doing to advance the interests of auto manufacturers inside the Beltway and across the nation. Click here to listen in to the latest Beltway Talk episode and subscribe to the entire podcast series.

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