President Donald Trump and the CEOs of America’s Detroit Three automakers are meeting for breakfast Tuesday morning, and there’s not much mystery about what they’re going to be talking about. Here’s Trump early morning tweet:
Will be meeting at 9:00 with top automobile executives concerning jobs in America. I want new plants to be built here for cars sold here!
— Donald J. Trump (@realDonaldTrump) January 24, 2017
The new president has been particularly harsh toward U.S. automakers building cars for sale in this country that are made in Canada and, particularly, Mexico. Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) have both canceled plans to build new plants in Mexico, and Fiat Chrysler Automobiles N.V. (NYSE: FCAU) has unveiled a $1 billion investment in U.S. expansion of plants in Michigan and Ohio.
While both Ford and GM have claimed that expansion plans in Mexico were shelved for business reasons, the timing of the announcements certainly lend some credibility to the power of the presidency to move things along.
Given that Trump and his nominee to become the administrator of the Environmental Protection Agency (EPA) are sympathetic to reducing regulation, especially regarding restraints on the use of fossil fuels, it would not be a surprise if the automakers seek either delays or easing of the Obama-era fuel-efficiency standards. That’s practically a no-brainer, even though the industry agreed in 2012 to a 2025 deadline for raising fuel-efficiency standards to 54.5 miles per gallon.
Here’s a late tweet from Reuters on Trump’s take on fuel-efficiency regulations and the environment in general:
BREAKING Trump, at automaker CEO meeting, cites pledge to cut regulations, says environmentalism is out of control.
— Reuters (@Reuters) January 24, 2017
Where the going gets a little tougher is on the importation of cars made outside the country. The president has threatened a 35% tariff on cars built outside the United States for sale in this country. Such a tax would hit other carmakers like Toyota Motor Corp. (NYSE: TM) and Volkswagen as well.
No late-breaking tweets on tariffs yet, however. Stay tuned.
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