How Trump Nearly Justified Car Tariffs
The Trump Administration never released its much-mooted 116-page argument for “national security” tariffs on Volkswagen s and other foreign cars, and now we know why, according to The Wall Street Journal. Credit to Commerce Secretary Gina Raimondo for finally publishing it this month and letting the public see the shoddy handiwork. President Trump ultimately didn’t impose the suggested tariffs of up to 35% on foreign autos, but the report is a warning of how much trade power Congress has ceded. A law known as Section 232 lets the President “adjust” imports if they threaten to impair “national security.” The autos report defines that expansively to include not only “national defense,” but also “the general security and welfare of certain industries” that are believed “critical.” One takeaway is that Congress ought to get its act together and revise or repeal Section 232. The law is so expansive that in a 2018 court case the government declined to answer directly when asked if the President could unilaterally tax imported peanut butter. A second point is that the Biden Administration should stop being so timid in jettisoning President Trump’s protectionism. Read more here (Source: The Wall Street Journal).
VW to End U.S. Production, Sales of Passat as it Focuses on SUVs
Volkswagen AG said Monday it will end U.S. sales and production of the Passat sedan next year, the latest shift by automakers away from cars and toward larger sport utility vehicles, reports Reuters. Volkswagen said it will end U.S. assembly of the Passat sedan in Tennessee with model year 2022. VW has sold various versions of the Passat since 1974 in the United States - initially under the Dasher and Quantum names - and the Passat name first appeared in the U.S. market in 1990. Since 2011, Volkswagen has built more than 700,000 Passat vehicles at its Chattanooga factory. A version of the car has also been on sale in China, assembled by SAIC in Shanghai, the company said. VW is building its Atlas SUV in Tennessee and next year will begin production of its electric ID.4 SUV at the U.S. plant. Read more here (Source: Reuters).
Olympic Sponsor Toyota to Skip TV Commercials Amid Lackluster Support in Japan
Tokyo 2020 sponsor Toyota will not run Olympics-related TV commercials amid lackluster public support for the Olympics, with two-thirds of Japanese doubting organizers can keep the games safe during the COVID-19 pandemic, according to a local media poll. Automotive News reports that Toyota Motor Corp. President Akio Toyoda and other executives will not attend the opening ceremony either, Toyota said on Monday. "It is true that Toyota will not be attending the opening ceremony, and the decision was made considering various factors including no spectators," a spokesperson said. "We will not be airing any commercials related to the games in Japan," she added. With just four days before the opening ceremony in Tokyo, 68 percent of respondents in an Asahi newspaper poll expressed doubt about the ability of Olympic organizers to control coronavirus infections, with 55 percent saying they were opposed to the games going ahead. Read more here (Source: Automotive News).
Car Owners Return to Highways, and Their Insurers Pick Up Tab for Accidents
A pandemic-related windfall for U.S. car insurers is diminishing as millions of vehicle owners are back on the nation’s roads again, reports The Wall Street Journal. Car insurers’ second-quarter results will face tough comparisons with the year before, when carriers benefited from an unprecedented drop in miles and a steep decline in accident volume. Many Americans hunkered down in their homes in the second quarter 2020 as the nation weathered the early stages of the Covid-19 crisis. The stage will be set Tuesday by Travelers, one of the first of the big property-casualty insurers to report earnings for the quarter. It is a leading issuer of policies protecting small and midsize U.S. businesses, and is a top-10 seller of car insurance to individuals as measured by premium volume. Accidents are on the rise from last year. Last week Progressive Corp. reported a 47% year-over-year second-quarter increase in accident volume as well as an 8% surge in claims costs. Read more here (Source: The Wall Street Journal).
Very Used Cars: High-Mileage Models Are Now Selling for Big Bucks
According to the valuation experts at Edmunds.com, the average pre-owned vehicle on a dealer’s lot that’s racked up between 100,000-109,999 miles rose in value by 31 percent over the past year, from $12,626 in June 2020 to $16,489 last month. That’s right, reports Forbes; they actually increased in price by nearly a third. It seems everything we thought we knew about used car prices is now wrong. With production of many new-vehicle lines being slowed or halted by the current microchip shortage, a lack of supply has sent more U.S. consumers (even rental companies) to the used-car market. In turn, the upsurge in demand along with a short supply of product to sell (fewer new models sold means fewer trade-ins winding up on used-vehicle lots) has caused prices to skyrocket literally across the board. Read more here (Source: Forbes).
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