Toyota Says Trump's Latest Tariff Threat Shows Japanese Investments in U.S. Are 'Not Welcomed'

First Up 05/20/19

Auto Industry Welcomes Bipartisan Opposition to Tariffs
The auto industry stands united in encouraging accountability and clarity when considering tariffs on national security grounds, according to a Morning Consult opinion piece by leaders of the Driving American Jobs Coalition—including AIADA President and CEO Cody Lusk. Fortunately, upon taking the Senate Finance Committee chairmanship at the beginning of the year, Sen. Chuck Grassley announced that one of his top priorities would be to review the use of Section 232 tariffs under the Trade Expansion Act of 1962. With harmful Section 232 tariffs on auto and auto parts imports still under consideration, it has been encouraging to see lawmakers from both parties come together to propose common sense solutions that would curtail misuse of a national security remedy and avoid punitive tariffs of up to 25 percent on the auto industry. Led by Reps. Terri Sewell (D-Ala.) and Jackie Walorski (R-Ind.), a bipartisan group of 159 House lawmakers – 81 Republicans and 78 Democrats – recently sent a letter to White House National Economic Council Director Larry Kudlow advising that Section 232 auto tariffs would raise prices for consumers and threaten jobs across the industry. Read the rest of the editorial piece here. 

Toyota Says Trump's Latest Tariff Threat Shows Japanese Investments in U.S. Are 'Not Welcomed'
CNBC reports that Toyota Motor said President Donald Trump’s latest move in the administration’s international trade war was a “major setback” for American consumers, shows the company’s investments in the U.S. are “not welcomed,” and that contributions from its American employees are “not valued.” Trump issued a new directive Friday giving Japan and the European Union six months to renegotiate their trade deals with the U.S. so that the “American automobile industry, its workforce, and American innovation” are protected. The Japan automaker’s comments Friday come after the White House said U.S.Trade Representative Robert Lighthizer will “address the threatened impairment” of national security from auto imports. “Our operations and employees contribute significantly to the American way of life, the U.S. economy and are not a national security threat,” Toyota said in a statement. Toyota said it has been “deeply engrained” in the U.S. for more than 60 years and has invested over $60 billion in the country, employing more than 475,000 Americans. Read its full statement here. For more from CNBC, click here. 

U.S. Ends Tariffs on Canada, Mexico Steel and Aluminum
The United States will lift tariffs on steel and aluminum from Canada and Mexico, ending a yearlong standoff between two of the world's largest trading partners that cost Detroit automakers billions and threatened smaller suppliers. According to The Detroit Free Press, the Canadian government announced the deal Friday, removing a key obstacle to ratifying the new North American trade pact. Reports said that Trump met via phone with Canada's Prime Minister Justin Trudeau to hammer out a deal that will provide tremendous economic relief to Detroit automakers, among other U.S. businesses that were stung with higher materials and related costs. The tariff dispute had included Canada’s decision to retaliate with about $16 billion in duties on American products. Canada's CBC News said that the deal would not put quotas on Canadian steel exports, nor limit Canadian imports to a specific share of the U.S. market. The agreement includes a key American demand — that all three countries monitor and respond to surges in steel and aluminum imports. Read more here. 

Mercedes Tells U.S. Dealers That Products, Trims Will Be Reduced
Hoping to take some of the complexity out of a product portfolio that has proliferated in nameplates, model variants, trim packages, and engine options over the last two decades, Mercedes-Benz told dealers this month that it will jettison some of its U.S. offerings in the coming year. According to Automotive News, the brand's nameplates in the U.S. have nearly doubled to 15 since 2000. Factor in engine variants and body styles, and the luxury automaker sells nearly 90 models stateside. "We are going to see models go away within the next 12 months," said one dealer who attended the closed-door meeting. "Within the next 90 days, we might see some of those announcements." Mercedes also will prune the number of options and equipment packages it offers, according to people who heard the presentation, eliminating poor-selling ones while making the most popular options standard equipment on certain models or tacking them onto existing feature packages. Read more here. 

Nissan CEO's 'Big Burden' is to Get U.S. Business Back on Track
The U.S. used to be Nissan Motor Co.’s biggest source of profit, helping fund expansion plans around the globe. Now, its operation in the country is a major problem child and challenge for embattled CEO Hiroto Saikawa, reports The Detroit News. Nissan said that U.S. sales plunged 9.3 percent in the fiscal year ended in March and predicted a further drop, sending shares to their lowest since 2012. The company’s profit margin in the country has shrunk to about 1 percent to 2 percent. Saikawa, 65, called the results “rock bottom” and pledged a recovery. “We need to revive the U.S. operation,” the chief executive officer said as Nissan reported its lowest earnings in a decade. “We have excessive capacity and unprofitable operations, which are becoming a big burden.” The U.S. slump underscores Nissan’s broader operational challenges that have been overshadowed by the arrest of former leader Carlos Ghosn and the management turmoil that’s ensued. Read more here. 

Webinar TOMORROW: Let Go and Let Google 
Join Google's Senior Automotive Retail Strategist, Kelly McNearney, on Tuesday, May 21st at 2:00pm EDT as she demonstrates how to drive more dealership visits using Google machine learning. Kelly will discuss how dealers need to "let go" of traditional marketing and "let Google" use advanced algorithms, machine learning and data to bring their business into the digital age. To register, click here.

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