January 22, 2019
NEW AUTO TARIFFS WILL THREATEN U.S. JOBS AND HURT CONSUMERS
America’s franchised auto dealers have concerns regarding potential negative impacts to trade policy as the Administration considers imposing tariffs of up to 25 percent on imported automobiles and auto parts. Additionally, the Administration’s proposed trade agreement to replace NAFTA, the United States-Mexico-Canada Agreement (USMCA), will create both new standards for domestic parts content of vehicles assembled in North America and new labor wage standards for auto workers. These efforts could dramatically increase the price of new and used vehicles. NADA supports President Trump’s goals of modernizing our trade agreements and moving toward freer and fairer trade, but steep new tariffs on autos and auto parts would hurt the auto industry and consumers. As no vehicle is 100 percent domestically made and the average vehicle assembled in the U.S. has an international parts content of 40 percent, new auto tariffs would impact all dealers due to increased prices, stifled demand for new vehicles, and lost jobs. Congress must ensure that any new trade agreements do not unduly increase vehicle prices or jeopardize American jobs.
SELF-DRIVING CARS LEGISLATION MUST PRESERVE STATE VEHICLE FRANCHISE LAWS
In the 115th Congress, legislation to advance self-driving vehicles (H.R. 3388/S. 1885) was passed by the House and the Senate Commerce, Transportation and Science Committee, but was not enacted. To ensure automakers are not forced to build different self-driving vehicles for different states, the legislation would have preempted certain state laws that are related to the operation of a vehicle. Historically, the federal government has preempted only state laws that impact vehicle design, construction and safety. NADA agrees that state laws related to vehicle design should be regulated at the federal level to ensure uniformity, while also strongly urging Congress to preserve the states’ traditional role to license and regulate vehicle commerce as applied to self-driving vehicles. Self-driving vehicle legislation will likely be introduced in the 116th Congress. Congress must ensure that a state’s traditional role to regulate vehicle commerce within its borders is explicitly preserved as applied to self-driving vehicles.
OPPOSE OVERBROAD RECALL BILLS
In the 115th Congress, Sen. Blumenthal (D-Conn.) and Rep. Schakowsky (D-Ill.) introduced bills (S. 1634/H.R. 3449) that would have crippled the used-car market by halting the dealer sale or wholesale of any used car under open recall, even though most vehicle recalls do not require the drastic step of grounding. These bills would create a “trade-in tax” that would instantly devalue a car buyer’s trade-in by grounding recalled vehicles for minor matters, such as a peeling sticker. Sen. Blumenthal and Rep. Schakowsky will likely reintroduce similar legislation in the 116th Congress. Congress should support initiatives to increase recall completion rates and oppose proposals that would create a consumer “trade-in tax.”
MODERNIZE THE TRUCK FLEET – REPEAL THE FEDERAL EXCISE TAX ON HEAVY-DUTY TRUCKS
During consideration of an infrastructure bill, Congress should revisit the 12 percent federal excise tax (FET) imposed on most new heavy-duty trucks. This tax routinely adds as much as $22,000 or more to the price of a new heavy-duty truck and is in addition to the nearly $40,000 in recent federal emissions and fuel-economy mandates. In the 115th Congress, Sen. Gardner (R-Colo.) and Rep. LaMalfa (R-Calif.) introduced bills that would have repealed the FET (S. 3052/H.R. 2946). Congress is urged to repeal the FET to spur new truck sales and promote the entry of cleaner and safer trucks to modernize the fleet.
Download the brief