CBT News: Broad-Based Auto Tariffs Could Be Devastating to Economy, Says Cody Lusk

First Up 07/12/18

CBT News: Broad-Based Auto Tariffs Could Be Devastating to Economy, Says Cody Lusk
Cody Lusk, President, and CEO of the American International Automobile Dealers Association joined CBT Automotive Network to talk about the on-going trade war with the U.S., Mexico, Canada, and the EU and how it will affect automotive dealers, manufacturers, and the American economy. There are a lot of moving parts taking shape these days and it is safe to say things are heating up and not necessarily for the good. Just this past weekend industry leaders have been keeping an eye on a number of topics that not only includes steel and aluminum tariffs but also the 301 with China, and the pending U.S. Department of Commerce Initiates Section 232 investigation of auto imports with herrings commencing in the coming days. Lusk shares more on what dealerships need to know, worry about, and how to prepare or support an outcome. Watch the interview here.

Representative Jackie Walorski (R-Ind.), Mike Kelly (R-Pa.), Ron Kind (D-Wis.), Terri Sewell (D-Ala.), and a growing bipartisan group of lawmakers, are planning to send a letter to Commerce Secretary Wilbur Ross. The letter affirms that cars are not a threat to national security and that the Section 232 investigation is not a productive use of taxpayer dollars. Take action now by asking Congress to sign a bipartisan letter affirming that cars are not a security threat.  

Senate Sends Trump Message to Slow Down on Tariff Escalation
The U.S. Senate took President Donald Trump to task on trade but fell short of curtailing his power to impose tariffs, reports Bloomberg. In an 88-11 vote on Wednesday, the Senate approved a symbolic motion backing a role for Congress in requiring tariffs based on national security, such as those Trump imposed on steel and aluminum imports and is contemplating on autos. The vote came a day after the administration said it would impose a new round of 10 percent tariffs on $200 billion of Chinese goods as part of a dispute over alleged Chinese theft of U.S. intellectual property. The non-binding effort was sponsored by retiring Senator Bob Corker, a Tennessee Republican who has been a critic of Trump’s trade agenda and is especially concerned about damage to his home state from a tariff on auto imports. “This is not being imposed for national security reasons,” Corker said on the Senate floor. “This is an abuse of presidential authority.” Read more here.

Audi Tops Ranking Measuring Brand Treatment of Car Shoppers While In-Store
The Audi brand dealerships rank highest in the latest Pied Piper Prospect Satisfaction Index (PSI) study that measures the treatment of 3,466 “mystery” car-shoppers at dealerships across the U.S., reports Auto Remarketing. This is the first year that the Audi brand has lead the Pied Piper PSI study ranking. Not only did car shoppers tell Pied Piper management company they consider Audi dealerships “most helpful", but they also say the German brand's salespeople are most likely to ask how a vehicle will be used, which often leads to a better understanding of customer needs. Meanwhile, Lexus dealerships rank second, followed by Toyota, Mercedes-Benz, Infiniti, and RAM. Click here for more information about the Pied Piper Prospect Satisfaction Index and complete study results. Read more from Auto Remarketing here.

Hyundai Motor Union Warns Auto Tariffs Could Hurt U.S. Jobs
Hyundai Motor Co.’s labor union said Thursday that steep auto tariffs the U.S. is considering could cost tens of thousands of American jobs, echoing concerns of the global auto industry as spiraling trade conflicts between the U.S. and other major economies heat up. The Associated Press reports that the labor union at South Korea’s largest auto company said in a statement that if President Donald Trump goes ahead with imposing 25 percent auto tariffs, it will hurt Hyundai’s U.S. sales and jeopardize some 20,000 jobs at a Hyundai factory in Alabama. The labor union, which has 51,000 members in South Korea, said its contracts with Hyundai Motor mandate Hyundai to shut down overseas factories first before closing its plants in South Korea in the event that restructuring becomes inevitable. Read more here.  

BMW Set to Raise Stake in Key China Joint Venture Above 50%
BMW AG stands to become the first foreign car manufacturer to own a majority stake in a Chinese joint venture, showing Beijing is following through on a pledge to increasingly open up the economy to global corporations. According to Automotive News, BMW plans to unveil the new ownership structure in its joint venture with Brilliance China Automotive Holdings soon, according to a person familiar with the plan, who asked not to be identified because the accord remains confidential. BMW now holds 50 percent of the venture. BMW Chief Executive Officer Harald Krueger was in Berlin at the start of the week during a summit between Chinese Prime Minister Li Keqiang and German Chancellor Angela Merkel. Among discussions were opportunities to open up China more to foreign investment. As part of corporate deals signed at the meeting, chemicals company BASF SE agreed to invest as much as $10 billion in a new factory in China that it would wholly own, also a first for that industry. Read more here. 

Webinar: Tax Reform – Dealer and Owner Implications
Join AIADA'sJuly AutoTalk webinar on Tuesday, July 17th as Amy Stillwell and Lewis Fisher, Automotive and Dealer Services division of Moss Adams discuss tax reform and what it could mean for your dealership. 

They'll cover:  
·    Important steps to take now 
·    Planning for the future 
·    What's gained/ What's lost

Sessions will be held at 10:00 a.m. EDT and 4:00 p.m. EDT. To register, click here.

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