Global auto leaders urge Washington to end trade turmoil

January 15, 2019 09:25
Fiat Chrysler CEO Mike Manley speaks to reporters at the North American International Auto Show in Detroit, Michigan, on Monday. Photo: Reuters

Leading automakers on Monday called on the Trump administration and Congress to resolve trade disputes, and end the US government shutdown, saying political uncertainty is costing the industry, Reuters reports.

Fiat Chrysler Automobiles CEO Mike Manley told reporters at the Detroit auto show that US metals tariffs will raise the automaker’s 2019 costs by US$300 million to US$350 million, or about US$135 to US$160 a vehicle, based on the automaker’s 2018 US 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.

The tariffs boosted industry vehicles prices by about US$600 on average, he estimated.

General Motors and Ford Motor are also taking financial hits from the US 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.”

The comments came as US 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 US are contending with American steel and aluminum prices driven higher by Trump administration tariffs.

Fiat Chrysler's Manley, meanwhile, said the US government shutdown is holding up certification of one of the company’s new heavy duty pickup truck models. 

“The earlier it can be resolved, clearly the better,” he said.

About one-quarter of federal government operations have been shut down by a lack of funding since Dec. 22 after President Donald Trump demanded US$5.7 billion this year from Congress for building a security wall on the southwest US border.

Concern in the auto industry about the uncertainty created by Trump’s efforts to revamp trade and environmental 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 US Trade Representative Robert Lighthizer, but he has no idea when the various issues will be resolved.

US-China trade tensions have forced Chinese automaker GAC to delay its planned entry to the American market, Wang Qiujing, head of GAC’s research and development center, told Reuters on Monday.

“We have postponed our launch until the first half of 2020,” he said, adding that the timing will depend on the outcome of US-China trade negotiations.

If the current 25 percent US tariff on Chinese-made vehicles continues, “the impact will be very significant,” Wang said.

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