Trump Administration Announces CAFE Rollback; USTR Holds First Public Hearings on USMCA Renewal
At an Oval Office event on Wednesday, President Trump announced the rollback of Biden era fuel economy rules as a way to improve vehicle affordability. The announcement on the changes to the Corporate Average Fuel Economy (CAFE) standards was attended by transportation officials, including Secretary Sean Duffy, and representatives from Ford Motor Company, General Motors, Stellantis and NADA. Members of Congress with strong ties to the auto industry were also in attendance, including Sen. Bernie Moreno (R-Ohio) and Reps. Mike Kelly (R-Pa.), Vern Buchanan (R-Fla.) and Roger Williams (R-Texas).
According to the announcement, automakers may now be required to meet an average of 34.5 mpg across 2031 model-year vehicles, whereas previous rules required an average of 50.4 mpg across 2031 model-year vehicles. Congress also ended fuel economy penalties for automakers through the One Big Beautiful Bill that passed earlier this year. The president’s proposal now enters a period of public comment through which the Department of Transportation will collect input from companies and citizens before finalizing the rule.
USMCA
Over three days of hearings held by the Office of the U.S. Trade Representative (USTR) this week, more than 100 representatives from industry, labor and agriculture groups testified on the operation of the U.S.-Mexico-Canada Agreement (USMCA). The U.S., Mexico and Canada will formally review the agreement next year, but the process is already underway, and the public hearing is the latest step.
Representatives from Autos Drive America, the American Automotive Policy Council, MEMA – the Vehicle Suppliers Association, the Automotive Parts Manufacturers Association, the United Auto Workers, in addition to others, all testified on the auto industry panel. AIADA submitted written comments to USTR in November focusing on the issue of vehicle affordability and the crucial role played by USMCA in reducing cost pressures for American car buyers.
The Trump Administration has been noncommittal on whether they will renew or choose to withdraw from the agreement and also indicated they might prefer separate bilateral deals with Canada and Mexico as opposed to the existing trilateral structure.
South Korea
On Monday, U.S. Secretary of Commerce Howard Lutnick announced that the reduced tariff rate of 15 percent for imports from South Korea, including those on autos, is now in effect, retroactive to November 1. The U.S. and South Korea struck a framework deal early last month, but it had yet to be implemented pending the introduction of legislation in the South Korean parliament to implement the country’s strategic U.S. investment commitments outlined in the deal.
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Quotes of the Week
“The actions that you’ve done as the president are definitely going to save our customers money. You made your promise to let the consumer buy what they want, and you delivered on that.” -Tom Castriota, Chairman, NADA (www.nada.org)
“We wish to emphasize the importance of restoring full, duty-free trade for USMCA compliant vehicles and auto parts. The fully integrated North American supply chains developed under NAFTA and USMCA underpin U.S. automotive competitiveness, and they are premised on duty-free treatment and the free circulation of parts within North America as they undergo multiple production stages.” -Rory Heslington, Vice President of Government Affairs, Autos Drive America (Politico)
“Korea’s commitment to American investment strengthens our economic partnership and domestic jobs and industry.” -Howard Lutnick, U.S. Secretary of Commerce (Reuters)
ICYMI
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Friday Feel Good
Here is just one recent example of how dealers are doing good in their communities:
Land Rover of El Paso in El Paso, TX donated 2,500 children’s books to fight illiteracy in the region. The donation came in support of Books as Gems, a local nonprofit whose mission is to increase literacy rate in the area.
We want to hear more about how you are supporting your local community – contact us on X @AIADA_News and use the hashtag #DealersDoGood.