Auto executives gathered in Detroit called on the Trump administration and Congress, Monday, to resolve trade disputes and end the government shutdown.
— Auto executives gathered in Detroit on Monday called on the Trump administration and Congress to resolve trade disputes, and end the government shutdown, saying political uncertainty is costing the industry.
U.S. trade officials are negotiating a new deal with China in hopes of avoiding new tariffs, while a new regional trade agreement with Canada and Mexico still needs congressional approval. Automakers producing vehicles in the United States are contending with U.S. steel and aluminum prices driven higher by Trump administration tariffs.
Fiat Chrysler Automobiles NV Chief Executive Mike Manley told reporters at the Detroit auto show on Monday that U.S. metals tariffs will raise the automaker’s 2019 costs by $300 million to $350 million, or about $135 to $160 a vehicle, based on the automaker’s 2018 U.S. sales.
Toyota Motor’s executive vice president for North American sales, Bob Carter, said the company has had to raise prices three times because of higher tariff costs — even though 96 percent of steel in Toyota U.S. vehicles is from U.S. steel plants. The tariffs boosted industry vehicles prices by about $600 on average, he estimated.
General Motors and Ford Motor are also taking financial hits from the U.S. steel and aluminum tariffs.
“Those are headwinds,” GM President Mark Reuss told Reuters. “It’s our job to run the business to offset those headwinds.”
GM Chief Executive last Friday promised investors the company would boost 2019 profit despite tariff-related costs and investments in electric vehicles. She stuck to her plans to target five North American factories for closure and cut nearly 15,000 jobs overall.
About one-quarter of federal government operations have been shut down by a lack of funding since Dec. 22 after President Donald Trump demanded $5.7 billion this year from Congress for building a security wall on the southwest U.S. border.
Manley said the U.S. government shutdown is holding up certification of one of the company’s new heavy duty pickup truck models. Those vehicles are among the company’s most profitable products.
“The earlier it can be resolved, clearly the better,” he said.
Concern in the auto industry about the uncertainty created by Trump’s efforts to revamp trade and environ- mental policies is weighing more heavily as forecasters call for a slowdown in vehicle demand in the United States and China during 2019.
“There’s a lot of balls in the air right now that are unresolved,” Ford Executive Chairman Bill Ford Jr. told Reuters on the sidelines of the auto show. “Certainty is something we really desire because of our product lead times. We don’t have that right now.”
Ford said the automaker feels its opinions are being heard by U.S. Trade Representative Robert Lighthizer, but he has no idea when the various issues will be resolved.
Trade war delaying Chinese automaker’s US plans
DETROIT (AP) — The U.S.-China trade war has delayed but not derailed Chinese automaker GAC Motor’s plans to enter the American market, company officials said Monday.
Company President Yu Jun, speaking at Detroit’s North American International Auto Show, said the dispute is a factor in moving its U.S. product launch from the end of this year — as it announced at last year’s show — to June 2020. Still, analysts think they might have a longer road to the market.
President Donald Trump imposed tariff increases of up to 25 percent on $250 billion of Chinese imports over complaints Beijing steals or pressures companies to hand over technology. President Xi Jinping responded by imposing penalties on $110 billion of American goods.
Washington wants Beijing to change its plans to use government support to make Chinese companies world leaders in robotics and advanced technologies. Chinese officials have suggested Beijing might alter its industrial plans but reject pressure to abandon what they consider a path to prosperity and global influence.
A Dec. 1 agreement postponed further tariff increases. Economists say the 90-day postponement of additional tariff increases that had been meant to take effect Jan. 1 may be too short to settle the disputes bedeviling U.S.-Chinese relations.
Yu said the 25 percent auto tariffs would cause prices to rise to the point that GAC’s cars aren’t competitive. He’s optimistic that the trade dispute will be resolved in time for his company to meet its latest goal.
“China and the United States are the world’s two largest economies, so their trade tensions will not only affect these two countries but also the entire world,” he said through an interpreter. “So we believe the leaders of both countries will show their wisdom and the vision for the common interest of the entire world.”
Yu acknowledged GAC’s “uphill battle” to entering the U.S. market but he noted the company is making “steady progress.” In addition to opening the design centers in Los Angeles, Silicon Valley and Detroit, he said it expects to have its North American sales company running by March. After that, GAC will start to establish a distribution network and build brand awareness in the U.S.
GAC officials visited the National Automobile Dealers Association convention last March, holding an event that attracted 130 dealership companies from 30 states representing 1,100 dealers, he said. He added many expressed a “keen interest” in working with the company, which has continued discussions with them.