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Automakers Warn Trump Administration About Tariff Impact

Proposed tariffs could add $6,000 to price of a new car.

by on Jul.20, 2018

Commerce Secretary Wilbur Ross is leading the Section 232 investigation into whether or not imported automobiles and parts represent a threat to the U.S.

During the U.S. Department of Commerce’s public comment hearing today, the Trump administration was warned the steep tariffs it has under consideration could add a total of $83 billion to the cost of new vehicles sold to American consumers.

“Higher auto tariffs will harm American families and workers, along with the economy” and “would raise the price of an imported car nearly $6,000 and the price of a U.S.-built car $2,000,” the Auto Alliance said in a statement prepared for the hearing.

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Meanwhile, dozens of employees from Toyota’s 10 U.S. assembly plants descended on Washington D.C., to oppose the government’s threat to impose a 25% tariff on imported vehicles and parts. They were joined by U.S. production workers from other international automakers across the country. (more…)

Colorado Jumps on Path to Match California’s Zero Emission Mandate

Hickenlooper signs executive order to implement LEV standard.

by on Jul.19, 2018

Colorado Governor John Hickenlooper's recent executive order put the state on the track to match California's ZEV mandate.

Colorado, thanks to an executive order by the state’s Democratic governor, is on the path to becoming a ZEV state, joining California and nine other states that are using their authority to push cleaner and more efficient vehicles.

First, he wants the state to adopt California’s rules for becoming a low-emission vehicle state by the end of this year. This is in response to the Environmental Protection Agency’s move to weaken emissions requirements.

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The California Air Resources Board (CARB) manages the ZEV program, although it has also been adopted by Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont and the District of Columbia and now Colorado. Three other states, Washington, New Mexico and Pennsylvania have adopted similar rules. (more…)

Volvo Moves XC60 Production to Europe from China to Avoid Trump Tariffs

Automaker reports record first-half sales, profits.

by on Jul.19, 2018

Volvo chief Hakan Samuelsson said the company is shifting production of XC60 SUVs allocated for the U.S. from China to Sweden to avoid tariffs.

The effects of President Donald Trump’s tariffs on China are beginning to take shape — and it’s unlikely he’d hoped for this result.

Volvo Cars, which just opened a new plant in South Carolina, announced it would be shifting production of its XC60 SUV from China to … Europe. The move is to avoid the tougher tariffs currently in place on Chinese imports.

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Trump has been pushing foreign automakers to build more vehicles in the U.S., and Volvo’s new plant in Charleston will build the S60 sedan, later adding a SUV to the list, but that won’t be until 2021. (more…)

Auto Industry Unites to Challenge Trump Tariffs

UAW lone dissenter, seeks targeted tariffs.

by on Jul.19, 2018

Representatives from six auto groups testified at a U.S. Department of Commerce public hearing against new tariffs proposed by President Donald Trump.

With one exception – the UAW – the automotive industry is prepared to take a united stand against tariffs as the U.S. Department of Commerce holds a one-day public hearing on a Trump administration proposal to levy 25% tariffs on imported automobiles in the name of national security.

Seven associations representing almost 10 million jobs across the auto sector in the U.S. have joined together to urge the White House to not impose higher tariffs on imported autos and auto parts.

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“Raising tariffs on autos and auto parts would be a massive tax on consumers who buy or service their vehicles – whether imported or domestically produced. These higher costs will inevitably lead to declining sales and the loss of American jobs, as well as an increase in vehicle service and repair costs that may result in consumers delaying critical vehicle maintenance,” said the groups in an open letter to President Donald Trump. (more…)

Mexico Targeting End of November for NAFTA Deal

Next round of talks expected at the end of the month.

by on Jul.18, 2018

Mexican Economy Minister Ildefonso Guajardo said he is targeting the end of November to complete NAFTA negotiations.

After a series of delays, including one for Mexico’s presidential election July 1, the new goal for completing a renegotiation of the North American Free Trade Agreement is the end of November, according to Mexican Economy Minister Ildefonso Guajardo.

“If there is room before the end of this administration, we will certainly take advantage of the opportunity to conclude [negotiations],” he said. Mexico’s new president, Andres Manuel Lopez Obrador, takes office Dec. 1.

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Canada, Mexico and the United States have been haggling over the update of a new NAFTA since last August. The deal was expected to be completed by the end of 2017 has endured a series of delays over demands by the Trump administration as well as the aforementioned election. (more…)

Federal Reserve Board Raises Caution Flag on Tariffs

Rising trade tensions could negatively impact the U.S. economy.

by on Jul.18, 2018

Fed Chair Jerome Powell recently warned the U.S. economy could be hurt by escalating trade tensions between the U.S. and its trading partners.

The nervous reaction that has begun to paralyze decision-making in the auto industry has also drawn the notice of the Federal Reserve Board.

Federal Reserve Chairman Jerome Powell, who was appointed by President Donald Trump, cautioned during a Senate hearing that mounting trade tensions between the United States and major economic partners could pose serious risks to the U.S. and the global economy.

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Powell was cautious in his remarks and tried to avoid commenting directly on Trump’s policies, when pushed by members of the Senate Banking committee on how deeply the U.S. could be harmed in a trade war, according to The Hill. (more…)

Trump Tariffs Could Complicate PSA’s U.S. Market Return

“I could launch in Canada,” says PSA’s North American CEO.

by on Jul.17, 2018

While new Peugeot models, such as this 3008 crossover, would work for North America, PSA will develop unique U.S. products.

On Thursday, the U.S. Commerce Dept. will hold hearings in Washington, D.C. to decide if, as President Donald Trump has suggested, imported automobiles pose a threat to national security. If so, the White House could follow up with new tariffs of up to 25% on those vehicles.

That’s on top of the previously enacted tariffs on steel and aluminum that have already begun to drive up production costs for domestic manufacturers. And the industry’s response has been fierce in its opposition to the Trump administration’s proposal.

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But as much as the potential tariff hike has complicated matters for existing manufacturers, it is raising even more challenges for potential new entrants to the U.S. market, including PSA, the French parent of the Peugeot, Citroen, Opel and Vauxhall brands, which is in the midst of developing a strategy to return to North America for the first time in more than a quarter century. (more…)

Detroit Automakers Could Come Out Losers Even if Trump Scuttles Import Tariffs

One alternative could open U.S. up to flood of foreign-made pickups.

by on Jul.16, 2018

German Chancellor Angela Merkel, center, proposed eliminating all tariffs between trading partners.

The auto industry has been actively trying to get President Donald Trump to back off his threat to impose a 25% tariff on imported automobiles, even Detroit-based carmakers warning that such a move could wind up raising prices, slowing sales, reducing U.S. exports and hurting American jobs.

Ironically, one of the likely alternatives to new tariffs could be great news for American consumers – but a potential disaster for Detroit’s Big Three, opening them up to a new wave of competition in the most profitable segment of the U.S. automotive market.

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German Chancellor Angela Merkel, among others, has raised the prospect of effectively eliminating automotive tariffs entirely, while others are saying they should be a uniform figure shared among all major trading partners. That approach could force the U.S. to eliminate the so-called “chicken tax,” the relic of an old, Euro-American trade dispute that has effectively closed off the American pickup truck market for the past half-century. (more…)

Tesla Tops 200,000 US Sales; Set to Lose Fed Tax Credits

Being 1st could put EV maker at a disadvantage going forward.

by on Jul.13, 2018

Even when it wins, it loses. Tesla just passed the 200,000 vehicle mark, the most ever by an EV maker, but that brings to an end the tax credit.

Tesla is not just the country’s best-selling EV maker, but the first to sell more than 200,000 electric vehicles in the U.S. market. But that might not necessarily give the carmaker reason to celebrate.

Under guidelines set up by the Obama Administration and retained by Congress as part of last year’s tax overhaul, federal tax credits of up to $7,500 per vehicle apply only on the first 200,000 battery vehicles sold by an individual manufacturer. After that they begin to phase out, meaning that Tesla could be at a financial disadvantage once the company loses the incentives entirely by the end of next year.

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Other companies, including General Motors, Nissan and Ford, are approaching the threshold but their buyers will likely continue to receive some incentives well into 2020, barring any move by Congress – something considered unlikely – to extend the tax credits. (more…)

Hyundai Union Warns Tariffs Could Cause US Plant Closure

South Korean union contract calls for closure of foreign plants first.

by on Jul.13, 2018

Hyundai's plant in Montgomery, Alabama, could be impacted severely by a 25% tariff on imported vehicles by the Trump administration.

Up until now, China, Mexico, Canada and Germany have all been at the heart of unfolding controversy about trade and tariffs.

But a new report also suggests that tariffs could destabilize manufacturing base that the South Korean auto giant, Hyundai, has developed in Alabama.

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The South Korean labor union at Hyundai Motors has warned that the 25% tariff on autos being imported into the United States being considered by the Trump administration could jeopardize as many as 20,000 jobs in Alabama.  (more…)