The signing of USMCA let the industry catch its breath for a moment. It seems the moment has passed, however, now that US President Donald Trump’s administration is once again threatening Mexico and the world to impose tariffs on vehicle imports. Nothing has been declared yet, but industry leaders have already spoken against the possibility of hampering trade.

Ready for more? Buckle up!

Again with the Tariffs

Last Sunday, the US Department of Commerce delivered to Trump the results on the investigation under Section 232 regarding vehicle imports and their potential threat to national security. Although the results were not disclosed, experts forecast tariffs of 25 percent to vehicle imports that could impact up to 0.6 percent of the world’s GDP, according to Moody’s.

Mexico would not be exempt from these tariffs, which would only lead to prices increases in the US, according to Tom Sullivan, President of Toyota Motor Sales de México. “We hope Trump makes the best decision without impacting the US market,” he said during a press conference.

China Under the Spotlight

New USMCA local content rules will affect China, Japan, Germany and South Korea the most. As the biggest auto part exporter to North America, China alone supplied US$35.1 billion worth of components in 2018.

Talks between the US and China continue. In lieu of a trade war, both countries decided to solve their trade differences and reach an agreement before March 1, 2019. According to Trump, talks are moving forward but the deadline to reach an understanding might change.

Clean-energy Future on Dispute

Talks between Trump’s administration and the state of California reached a bitter end. The president remains firm on his position to scrap Obama-era’s GHG emission standards, while California and 12 other states are ready to take the matter to court and defend their right to set their own standards. “California and states throughout America are prepared to defend our national Clean Car standards even if the Trump administration intends to go AWOL,” said California Attorney General Xavier Becerra.

Amazon will lead an investment round of US$700 million to support new electric-vehicle startup Rivian Automotive. “This investment is an important milestone for Rivian and a change toward sustainable mobility,” said RJ Scaringe, CEO of Rivian Automotive.

Don’t forget to follow us on twitter at @mexautomotive and @mexautomotriz for the latest industry news.

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