Friday and Sunday marked dates for important victories gained by franchised dealerships who have been closely watching activities at the White House and how their businesses might be impacted.
Before the weekend, President Trump delayed proposed auto tariffs on Europe and Japan for six months, drawing cheers from both the National Automobile Dealers Association (NADA) and American International Automobile Dealers Association (AIADA).
Then before the next business week began, Trump lifted tariffs on steel and aluminum from Canada and Mexico.
“America is being respected again, and America is winning again because we are finally putting America first,” Trump said in a statement released by the White House.
The vehicle tariffs have been monitored closely by both NADA and AIADA as Trump used national security as the leverage point to form his strategy for potential action. Trump cited a report from the Secretary of Commerce as a reason for delaying the possible tariff.
“The report found that automotive research and development (R&D) is critical to national security. The rapid application of commercial breakthroughs in automobile technology is necessary for the United States to retain competitive military advantage and meet new defense requirements,” Trump said in the proclamation released by the White House.
“In light of the report’s findings, the Secretary recommended actions to adjust automotive imports so that they will not threaten to impair the national security,” the president continued.
“I have decided to direct the United States trade representative to pursue negotiation of agreements … to address the threatened impairment of the national security with respect to imported automobiles and certain automobile parts from the European Union, Japan, and any other country the trade representative deems appropriate, and to update me on the progress of such negotiations within 180 days,” Trump went on to say. “Under current circumstances, this action is necessary and appropriate to remove the threatened impairment of the national security.”
While Trump reiterated the national security thinking, AIADA maintained dealerships and their employees could be drastically impacted if the president follows through when the nation is set to celebrate Thanksgiving.
“The truth stands: imported autos and auto parts are simply not a national security threat,” AIADA president and chief executive officer Cody Lusk said. “Using this spurious claim as justification to force our trading partners into new negotiations will only create more uncertainty for America’s entire auto industry, including our country’s 9,600 international nameplate dealers and the 578,000 Americans they employ.
“If President Trump follows through on his threat to place 25% tariffs on imported autos and auto parts, he will be directly responsible for a drastic tax increase on American consumers, which could result in a loss of 2 million vehicle sales and jeopardize up to 700,000 American jobs.”
NADA also released a statement in response to the White House proclamation on auto tariffs, striking a similar tone about the precarious spot dealers and their staffs could find themselves should Trump followed through with this action involving the European Union and Japan.
“NADA understands and appreciates the administration’s attempts to level the trade playing field and eliminate unfair trade practices, but broad-based tariffs on autos and auto parts would be the wrong tool for the job because they would significantly increase the cost of all new vehicles sold in the U.S., greatly diminish consumer choice, and threaten hundreds of thousands of American jobs,” the association said.
“Our 18,000 franchised new-car dealers employ 1.1 million Americans in good-paying jobs that cannot be exported. These businesses and their employees are not a threat to national security. We must continue to work together to address genuine trade concerns, but without hurting American consumers, American workers, or our small businesses in the process,” NADA went on to say.
Steel and aluminum tariff decision
On Sunday, Trump issued another proclamation to lift the tariff on steel and aluminum from Canada and Mexico. Again, Trump said he based his decision on a report from the Secretary of Commerce.
“The United States has successfully concluded discussions with Canada and Mexico on satisfactory alternative means to address the threatened impairment of the national security posed by steel articles imports from Canada and Mexico,” Trump said in the proclamation released by the White House.
“The United States has agreed on a range of measures with Canada and Mexico to prevent the importation of steel articles that are unfairly subsidized or sold at dumped prices, to prevent the transshipment of steel articles, and to monitor for and avoid import surges,” the president continued. “These measures are expected to allow imports of steel articles from Canada and Mexico to remain stable at historical levels without meaningful increases, thus permitting the domestic industry’s capacity utilization to continue at approximately the target level recommended in the Secretary’s report.
“In my judgment, these measures will provide effective, long-term alternative means to address the contribution of these countries’ imports to the threatened impairment of the national security,” Trump added.
Like the auto tariff, this tariff lifting triggered relief from industry advocates. The American Automotive Policy Council (AAPC) is an association that represents the common public policy interests of its member companies — Fiat Chrysler, Ford and General Motors.
“We applaud today’s announcement that an agreement has been reached between the U.S., Canada and Mexico to address steel and aluminum tariffs,” AAPC president Matt Blunt said in a statement. “We are reviewing the agreement to better understand it, and we are hopeful that the agreement will effectively resolve the issue between the three trade partners.
“Together with the new USMCA trade agreement, an accord on steel and aluminum tariffs will help ensure that U.S. automakers will continue to be globally competitive and support American jobs and the U.S. economy,” Blunt went on to say.
Editor’s note: AuSM is reaching out to a variety of industry experts who will be sharing their assessments of these presidential decisions. Watch for a report arriving soon.