President Trump tells CEOs he wants more cars built in US

Leroy Wright
May 13, 2018

The president met with top auto executives to discuss the standards and tasked Transportation Secretary Elaine Chao and Environmental Protection Agency Administrator Scott Pruitt to handle the talks with California officials, according to two people briefed on the meeting.

On Friday, President Donald Trump pressured automakers in the build more of their vehicles in the United States and launched another new attack on the North American Free Trade Agreement, which has been beneficial to automakers.

Trump also heaped criticism on the North American Free Trade Agreement, the pact now being rewritten and in which the auto industry features prominently, but gave no hints on whether a deal could be struck by a key deadline next week.

Trump told those attending that the country is importing many cars and the White House wants those vehicles to be made in the US, adding they could be made in places such as Michigan, Pennsylvania, Ohio, North Carolina and SC.

The Obama-era rules adopted in 2012 sought to double average fleet-wide vehicle fuel efficiency to about 50 miles (80 km) per gallon by 2025, but included an evaluation due by April 2018 to determine if the rules were appropriate.

Automakers are asking the White House to meet with California to come to an agreement on keeping national standards fearing a long battle in court could leave automakers facing two distinctly different rules. Leaks about the Trump EPA plan already have provoked a suit from California and 16 other states. "The resulting regulatory nightmare would ultimately harm consumers by increasing vehicle costs and restricting consumer choice", Bainwol said.

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Fiat Chrysler Chief Executive Sergio Marchionne, whose company is shifting production of Ram heavy-duty pickup trucks from Mexico to MI in 2020, told Reuters before the meeting his company is "fully supportive" of Trump's efforts to revise the mileage rules and hoped for "an agreed way forward".

The White House meeting comes as trade officials from Canada, Mexico and the United States race the clock to reach a deal on a revised NAFTA but are hung up on Washington's demands to increase the US-made components in vehicles that receive duty free status. "We'll see what happens", Trump said, adding that Mexico and Canada "don't like to lose the golden goose". "I'm not representing Mexico and I'm not representing Canada", he said. He adds, "We'll see if we can make it reasonable".

When the single national standard was adopted six years ago, cars, which get better mileage than trucks and SUVs, made up just under half of USA new vehicle sales. Basically, the draft proposal would stall out fuel economy increases at just short of 42 mpg in 2020, and hold them there through 2026, rather than having the standards increase to 54.5 mpg by 2025.

Requirements now are lower for bigger vehicles such as trucks and SUVs, said Luke Tonachel, director of clean vehicles for the Natural Resources Defense Council. California has special rights when it comes to setting emissions standards for vehicles in the state.

Environmental groups also say the industry marketed trucks and SUVs to the public because they make bring higher profits than cars.

The chief executives of General Motors Co, Ford Motor Co and Fiat Chrysler, along with senior US executives from Toyota Motor Corp, Volkswagen AG ( VOWG_p.DE ), Hyundai Motor Co, Nissan Motor Co, Honda Motor Co, BMW AG and Daimler AG met with Trump, as did the heads of the two trade groups.

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