MARCH 12, 2019
POTENTIAL NEW AUTO TARIFFS THREATEN U.S. JOBS AND WILL HURT CONSUMERS
Automobile dealers support President Trump’s goals of modernizing our trade agreements and moving toward freer and fairer trade, but trade actions, such as steep new tariffs of up to 25 percent on imported autos and auto parts, would hurt the auto industry
and consumers. On February 17, the Commerce Department sent the results of their Section 232 national security investigation concerning autos and auto parts to the President. If the report, which has not been made public, finds that the national
security is threatened, the President can impose tariffs on autos and auto parts. Also, the Administration’s proposed trade agreement to replace NAFTA, the U.S.-Mexico-Canada Agreement (USMCA), could be voted on by Congress later this year. USMCA
would require higher North America content for parts and vehicles and new labor wage standards for auto workers. These efforts could dramatically increase the price of vehicles for consumers, resulting in a decline in new-vehicle sales and other negative
impacts on the U.S. economy. New auto tariffs would impact all dealers since no vehicle in the U.S. is 100 percent domestically made, and the average vehicle assembled in the U.S. has an international parts content of 40 percent. Congress must ensure that any new trade agreements or actions do not unduly increase vehicle prices, stifle demand for new vehicles, 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 of Representatives and Senate Commerce, Transportation and Science Committee, but the legislation 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 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 re-introduced this year. 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
Last 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. Similar legislation will
likely be reintroduced this year. 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). An industry coalition,
Modernize the Truck Fleet (MTF), is leading the effort to repeal the 102-year-old FET and identify viable funding options to replace this burdensome tax. 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.
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