Trump Renews Auto Tariff Threat

First Up 11/29/18

Trump Renews Auto Tariff Threat
President Donald Trump raised the prospect of slapping a 25 percent tariff on imported cars and ordered a review of China’s retaliatory auto tariffs against the U.S. as his administration continued to scramble to respond to General Motors Co.’s announcement of plant closures this week, reports Bloomberg. In a pair of Twitter posts on Wednesday, Trump pointed to a longstanding U.S. tariff on imported pickup trucks that has helped U.S.-based automakers dominate that market. He argued that a similar import tax on cars would have prevented GM’s move to close plants in the U.S. “The reason that the small truck business in the U.S. is such a go-to favorite is that, for many years, tariffs of 25% have been put on small trucks coming into our country. It is called the ‘chicken tax,”’ Trump said on Twitter Wednesday. The move comes just days before Trump is due to sit down for dinner with China’s Xi Jinping on the sidelines of a Group of 20 summit in Buenos Aires and some analysts said it appeared to be related to that. Read more here. 

Volvo Slows American Plant Hiring After China Hikes Tariffs
Volvo has reduced its hiring plans at its new assembly plant in Charleston, South Carolina, due to increased tariffs from President Donald Trump’s trade dispute with China. Volvo global CEO Håkan Samuelsson told USA Today in an interview Wednesday at the Los Angeles Auto Show that the company had throttled its South Carolina expansion plans. Originally, Volvo planned to hire 1,500 workers at the plant by the end of 2018 and 4,000 within a few years. The Chinese-owned Swedish brand opened the $1.1 billion plant earlier this year – its first U.S. factory – with plans to make vehicles there for the U.S., Europe and China. But after China hiked U.S. vehicle import tariffs from 25 to 40 percent in a dispute with Trump, those plans went awry. Volvo's new South Carolina plant, which opened in June, is gradually ramping up to produce the S60 sedan. In 2021, the plant will begin assembling the Volvo XC90 SUV. Once it's making both models, the plant will ship about half of its vehicles to foreign markets, according to Volvo's original plan. Read more here. 

U.S. Manufacturers Say Tariffs Will Bring Higher Prices, Not More Jobs
The administration's widening trade war will raise prices for U.S. consumers, but it won't bring back many manufacturing jobs that have moved overseas. According to CNBC, that's what more than 800 companies said in a survey released Thursday by IHS Markit, a London-based economics research firm. When the administration ramped up tariffs in July, President Donald Trump insisted the higher duties would encourage U.S. manufacturers to bring overseas jobs back home. Instead, more than 4 in 10 companies surveyed said they plan to raise prices to offset the higher cost of production. Just 1 in 10 said they plan to reduce the share of total output produced outside the U.S. Roughly the same number said the tariffs would encourage them to move more jobs offshore. Though many companies have tried to hold the line on price increases, the cost of higher tariffs will eventually be borne by consumers. One recent study estimated the economic impact of lost wages and higher prices at $2,400 per household in 2019. Read more here. 

Hyundai Unveils 2020 Palisade SUV at L.A. Auto Show
Hyundai threw its weight behind the SUV craze at the Los Angeles Auto Show on Wednesday, unveiling its new flagship, a blocky eight-passenger SUV called the Palisade. According to The Detroit Free Press, the 2020 Palisade goes on sale next summer. It’s 3 inches longer, 2.4 inches taller and 3.6 inches wider than Hyundai’s current SUV with three rows of seats, the Santa Fe XL. Hyundai designers worked hard to give the Palisade a premium appearance, with flush surfaces where window glass meets sheet metal and optional second-row captain’s seats. The Palisade is 3.6 inches longer than Toyota Highlander, but shorter than the Ford Explorer, Honda Pilot, and Nissan Pathfinder. Click here for a picture. To read more about Hyundai’s new SUV, click here. 

Japan's Prosecutors Vow to Hold Ghosn as Long as Needed
Japanese prosecutors said Thursday they will detain former Nissan chairman Carlos Ghosn for as long as is needed to finish their investigation into suspicions of financial irregularities, as the Renault-Nissan-Mitsubishi alliance reaffirmed its partnership. According to The Detroit News, Ghosn is suspected of violating financial laws by underreporting millions of dollars in income and Kelly of collaborating in that. Nissan has also said an internal probe triggered by a whistleblower found Ghosn allegedly misused company assets. Japanese automakers Nissan Motor Co. and Mitsubishi Motors Corp. have since dismissed Ghosn as their chairman. Renault SA of France has named an interim chairman but kept him on while seeking more information about his case. Last week, prosecutors obtained a court’s approval to keep Ghosn until Friday, in line with standard investigative procedures in Japan. After an initial investigation period, Japanese authorities can detain a suspect up to 20 days per charge, and gain more time by adding more charges. 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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