Last week, president Donald Trump vowed to spearhead a boom in the American auto industry, announcing a regulatory measure backed by many large auto companies, and going on to say that he would protect their employees.
Speaking at a testing centre for driverless cars in Michigan, the president promised once again to up manufacturing output by incentivising car companies to produce and hire in the US, while taking punitive measures against those that do not. He also highlighted vows to roll back fuel efficiency regulations and tweak trade deals that he considers bad for America, such as the North American Free Trade Agreement. He assured his audience that these changes would mark the end of what he calls an “assault” on the American auto industry. While he spoke, the administration’s mantra of “buy American, hire American” was emblazoned on a banner behind him.
Shortly before Trump delivered this speech, the EPA announced that it would review the Obama administration’s fuel economy standards that would cause regulatory compliance costs rise for auto companies. These standards would bring fuel economy up to 54.5 miles to the gallon on light-duty trucks by the year 2025, presenting a major strain on both automakers and fuel-efficient parts suppliers such as Borla. The EPA announced that it would be working up to the beginning of April 2018 on determining whether the guidelines were appropriate or not.
An EPA spokesman recognised the strain these regulations place on both automakers and the American public, and assured members of the press that they would be working closely with the Department of Transport to determine how realistic this approach is.
Many environmentalists have argued that rolling back the rules set out by Obama would only increase America’s reliance on fossil fuels, and make the issue of climate change even worse. Trump’s broader intentions to roll back federal regulations in general and downsize or completely eliminate government agencies have also breathed life into concerns that American health and environmental standards would falter.
During his visit to the testing centre, Trump used his platform to criticise various companies which had moved production facilities and jobs out of the US, and promoted a degree of protectionism which is rarely found in other high-ranking Republicans. He said his economic policy – including both regulatory rollback and tax cuts, will encourage more companies, auto manufacturers or otherwise, to invest more of their wealth and resources in the US.
Following the election last year, many analysts suggested that the new president’s promises to rub out existing trade deals that he said hurt working-class Americans was the deciding factor that won Michigan. This was the first election where the state had voted Republican since 1988. Critics of Trump, on the other hand, have argued that his economic agenda, notably his tax strategy, could wind up benefiting the wealthy American elite much more than any blue-collar workers.
As the EPA sets to work on its appraisal and the European auto industry becomes more and more dominated by a green agenda, the future is uncertain for the American automaker.
Donald Trump photo by Michael Vadon. License: CC BY-SA 4.0.