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Donald Trump in the Driver’s Seat?

by | Nov 16, 2016

It didn’t take long.  Less than two days after Donald Trump’s victory in the presidential election, the major automakers are making a play for regulatory relief under a Trump administration.

Specifically, on November 10 the Alliance of Automobile Manufacturers sent a letter to Trump’s White House transition team asking that the new administration put on hold key points of the Obama administration’s 2025 fuel economy and greenhouse rules and proposed that a new “presidential advisory committee” be created to coordinate the many federal agencies that oversee the industry.

The Alliance of Automobile Manufacturers is an association of twelve vehicle manufacturers including BMW, Fiat Chrysler, Ford, GM, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Porsche, Toyota, Volkswagen and Volvo.  The various federal agencies with which the automakers must contend include the EPA, National Highway Traffic Safety Administration, Federal Trade Commission, Federal Communications Commission, and the Consumer Financial Protection Bureau among others.

No one should be surprised by this, although it certainly arrived quickly.  The automakers have long considered the Obama administration’s rules, which become increasingly stringent starting with model year 2017, to be a substantial challenge to their engineering capabilities and to be significantly costly.  The industry has expressed support for the overall goals of greater vehicle efficiency and environmental responsibility, but this correspondence to the incoming team indicates that the automakers view Trump’s election as an opportunity to seek regulatory reforms.

The association’s letter called for a comprehensive review of regulatory and policy actions taken by the Obama administration, and given that Trump in his campaign pledged to conduct a wide-ranging review of existing regulations and place a moratorium on new ones, the timing is on the automakers’ side.

The 2025 fuel economy and greenhouse gas rules have been a key piece of President Obama’s initiatives to address climate change. Trump, in contrast, has said that he believes climate change is a hoax and has indicated he would roll back EPA regulations aimed at reducing carbon emissions.  But any rollback of the 2025 standards will encounter stiff opposition from environmentalists, who have in general offered strong support of the Obama administration’s policies.

Since the first federal regulations were imposed on the auto industry with the creation of the National Highway Traffic Safety Administration almost 50 years ago, there has been an ongoing battle between the industry and the lawmakers.  At this very early post-election stage, it remains to be seen to what extent the incoming president’s administration may offer regulatory concessions to the industry. logosurfboardsolo-small

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