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Archive for the ‘Trade’ Category

Makers Claim Trump Investigation of Auto Imports Ill-Conceived

Trade Expansion Act clause not intended for this type of use.

by on May.25, 2018

President Donald Trump instructed Commerce Secretary Wilbur Ross, left, to determine if auto imports are a threat to national security.

The Trump administration’s decision to launch a complex investigation to determine if the import of finished vehicles and automotive components represents a threat to national security brought a swift reaction from carmakers and other groups.

The Alliance for Automobile Manufacturers in Washington D.C., the industry’s principal lobbying group in the U.S. Capitol, said the investigation launched by the U.S. Commerce Department under Section 232 of the Trade Expansion Act of 1962 is a process that has rarely been used and traditionally has not focused on finished products.

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“We are confident that vehicle imports do not pose a national security risk to the U.S. Last year, 13 domestic and international automakers manufactured nearly 12 million vehicles in the U.S. The auto sector remains the leading exporter of manufactured goods in our country,” the Alliance noted in a statement. (more…)

Trump Auto Tariff Threat Triggering Backlash

President calls auto industry "critical to our strength as a nation," but critics warn new tariffs could "undermine" global trade.

by on May.24, 2018

GM CEO Mary Barra welcomes President Donald Trump's efforts to "level the playing field."

President Donald Trump is once again threatening to slap steep tariffs on imported cars, trucks and auto parts, his latest in a series of moves challenging free trade that also sees a continuing effort to rewrite the North American Free Trade Agreement.

Trump said he asked Commerce Secretary Wilbur Ross to investigate whether auto imports are a threat to national security. If so, he would be able to sidestep Congress and institute tariffs under Section 232 of the Trade Expansion Act of 1962 — one of the strongest trade tools in the president’s arsenal. But the proposal is already triggering a backlash from trade partners in Europe and other parts of the world.

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“Core industries such as automobiles and automotive parts are critical to our strength as a nation,” Trump said in a short statement released by the White House Press Office. (more…)

China Cutting Tariffs on Imported Vehicles

But revised rate is still six times higher than what U.S. levies.

by on May.22, 2018

Chinese President Xi Jinping announced plans to cut tariffs on cars to 15% and components to 6%.

Under mounting trade pressure from the U.S., China said Tuesday that it will reduce duties on imported passenger vehicles from 25% to 15%, while also cutting the tariff on imported automotive parts and components to 6%.

Chinese President Ji Xinping had promised to cut tariffs in comments made last month, though it is unclear if the move will go far enough to satisfy critics as diverse as Tesla CEO Elon Musk and U.S. President Donald Trump. With the exception of pickup trucks, the American tariff on imported vehicles is just 2.5%.

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In a series of tweets last month, Trump referred to the automotive imbalance asked, “Does that sound like free or fair trade? No, it sounds like STUPID TRADE – going on for years!” (more…)

China Tariffs on Hold as Trade War Talk Recedes

Two countries putting a deal together.

by on May.21, 2018

The Trump administration is backing away from proposed tariffs on a variety items imported from China.

The announcement by the U.S. Secretary of the Treasury Steve Mnuchin that the Trump administration will suspend any plans to impose tariffs on Chinese imports lowers the risks for American and European carmakers, fearing the impact of a trade war.

Companies such as Mercedes-Benz and BMW, which export American-made vehicles to China, will apparently be spared, facing the substantial tariffs the Peoples Republic of China had proposed imposing on vehicles exported from the United States.

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Importers of vehicles from China, such General Motors, also will be spared American tariffs on vehicles from Chinese factories. (more…)

NAFTA Talks Encroaching on Congressional Deadline

If deal isn't reached by deadline, might have to wait until 2019.

by on May.17, 2018

Republican House leader Paul Ryan noted if NAFTA talks don't produce a new deal soon, it may not get approved until 2019.

The Trump administration’s plans to overhaul the North American Free Trade Agreement may have to wait until next year.

Politico, the Washington-based website for political news, noted that House Speaker Paul Ryan said the Trump administration has until May 17 to submit a final NAFTA deal if it wants lawmakers to vote on the revised agreement this year.

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Negotiators from the U.S., Mexico and Canada have nothing to show for their efforts despite meeting all week in Washington DC to coming up with a deal, knowing that time was running short to get a deal through Congress in this legislative session.  (more…)

New US Content Proposal for NAFTA Gets Tepid Response

Mexico balks at new demands from negotiators.

by on May.01, 2018

Trade representatives from Canada, Mexico and the U.S. continue negotiating a revised NAFTA agreement.

The latest proposals from the U.S. in the ongoing North American Free Trade Agreement talks have been met with tepid curiosity and outright defiance from Mexico’s delegation.

The U.S. proposal, according to Reuters, increases NAFTA’s regional automotive content and would carry a four-year phase-in to meet a higher, 75% regional value threshold. The current level is 62.5% while new labor content rules requiring substantial work at wages of $16 an hour or higher.

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The new deal would require the $16 wage on work comprising 40% of the value of light-duty passenger vehicles and 45% for pickup trucks. Mexico, where salaries average less than $6 per hour at automakers, wasn’t keen on the new idea. (more…)

Honda Profits Soar 72% in 2018; Maker Predicts 2019 Drop

Declining sedan sales, stronger yen and dollar to crimp 2019.

by on Apr.27, 2018

Honda's concerned about the falling sales of sedans in North America, and it predicted falling profits in 2019.

Honda Motor Co. gaveth with its fourth-quarter and full-year earnings report and it tooketh away with its 2019 forecast. The Japanese automaker reported a 12% jump in its quarterly profit while its full year profits soared 72% due to changes in U.S. tax policy.

For the final quarter, Honda reported a profit of 107.7 billion yen, or $988 million, up from 95.9 billion yen a year earlier. Revenue for Q4 was 3.9 trillion yen, or $36 billion, an improvement of 4%. For the full year, the company saw profits of 1.06 trillion yen, or $9.7 billion, on revenue of 15.3 trillion yen.

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The company sold nearly 5.2 million vehicles around the world for the fiscal year, up from 5 million the previous fiscal year. The result was just slightly short of its forecast of 5.22 million vehicles. (more…)

BMW Slashing Presence at Euro Car Shows, Could Pull Out of Some

Bavarian automaker shifting resources to alternate events, like CES.

by on Apr.24, 2018

The BMW i Vision Dynamics made its debut at the 2017 Frankfurt Motor Show.

Already planning to skip the North American International Auto Show in Detroit next January, BMW is reportedly planning to sharply scale back its presence at European events like the 2019 Frankfurt Motor Show, according to a German news report, and it could abandon some of those entirely, as well.

The news comes as automakers large and small start to rethink their commitment to traditional auto shows which, the latest thinking goes, don’t generate the bang-for-the-buck they once did. At the same time, manufacturers are being offered a range of new alternatives, whether tech-focused events like CES or even one-brand shows that avoid the need for a carmaker to share the stage with competitors.

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BMW is planning to slash as much as 75% of its 2019 auto show budget, reports the German business publication Handelsblatt. At the Frankfurt Motor Show, where BMW had previously gone so far as constructing an indoor driving track, it will have just a 10,000 square foot display at the next event down from 36,000 in 2017.

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New Roadblocks Thrown Up in NAFTA Negotiations

Trump pushing for new mandates for Mexico.

by on Apr.24, 2018

NAFTA talks are ongoing and negotiators are expressing optimism about completing a new deal.

Efforts to reach an agreement on revisions to the North American Free Trade Agreement appear to have hit another speed bump.

President Donald Trump said on Monday he may ask Mexico to halt the flow of undocumented migrants from Central America into the U.S. as a condition for a renegotiated trade deal.

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“Mexico, whose laws on immigration are very tough, must stop people from going through Mexico and into the U.S. We may make this a new condition of our new NAFTA Agreement. Our Country cannot accept what is happening! Also, we must get Wall funding fast,” Trump wrote on Twitter. (more…)

Japanese Surge Reveals Broader Jump in Auto Imports

Rising numbers from Japan, Mexico, Korea, China challenge Trump 

by on Apr.20, 2018

Demand for the latest version of Nissan's Rogue has contributed to an increase in imports from Japan.

When Toyota and Mazda open a new assembly plant in Alabama in 2021, it will become the latest in a growing array of automotive plants Japanese manufacturers have set up in the U.S. since the mid-1980s – yet despite investing billions in their American operations, Japanese manufacturers have also been increasing exports to the U.S. from their home market factories.

The number of Japanese-made vehicles imported into the U.S. rose almost 10% during the first quarter of 2018. And Japan wasn’t alone.  Auto imports, as a whole have actually been on the rise, whether from Korea, Europe or Mexico, the latter country shipping about 7.5% more vehicles to the U.S. in March than the year before – despite Pres. Donald Trump’s high-profile push to bring more auto production back to the States.

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“Japan sends us million and millions of cars, and we tax them virtually not at all. And we don’t send so much product because we have trade barriers and lots of other things,” the president complained during a news conference this week while standing alongside Japanese Prime Minister Shinzo Abe.

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