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Generates $500 billion in annual paychecks, $205 billion in federal & state taxes
According to NADA, there are roughly 17,000 auto dealerships nationwide and generate $995
billion in annual sales – 90 % are privately-owned, small businesses
14 domestic and international automakers currently operate 45 assembly plants across 14
states
Where autos are built
45 14
Plants States
New Assembly Plants in the NAFTA Region
Pre and Post Agreement
From 1983 until the signing of NAFTA, 22 new plants were added in the NAFTA region - 16 in the
U.S., 4 in Canada and 2 in Mexico
Since the signing of NAFTA, 27 new plants have become operational - 15 in the U.S., 11 in Mexico
and 1 in Canada
One more plant underway in the U.S. and ongoing multi-billion reinvestment in existing plants
During same timeframe, there has been significant production capacity added around the world,
as global companies compete to meet rising demand and shift to global platforms to cut costs
Plants in Mexico and Canada rely a great deal on U.S. manufacturing suppliers = supports U.S. Jobs
NAFTA, while in need of an update to meet the realities of the 21st century, is fundamentally
consistent with a strong automotive sector in the United States
Plant Openings in NAFTA Region Since 1981
6
NAFTA Goes Into
Effect 1/1/94 Plant Openings 1994 - 2018
5
US: 15
4
Mexico: 11
Plant Openings
Canada: 1
3
16,000,000
14,000,000
Units Sold
12,000,000
10,000,000
8,000,000
--
80,000 Canada 37 2%
W. Europe -448 -3%
70,000
China 23,206 1789%
60,000 Japan -1,950 -17%
Other 21,337 361%
50,000
World 43,390 93%
40,000
30,000
20,000
10,000
0
Regulatory Reform:
Section 232 investigations typically contain a detailed request or application laying out the nature
and scope of the investigation. No such document accompanied this notice.
28 investigations since 1962 (26 by previous Administrations), rarely conducted on finished product,
like automobiles.
14 of 26 initiated in response to requests by non-government parties
12 of 26 initiated in response to request by a government agency
Overwhelming opposition
Nearly 3,000 comments – only 3 organizations supportive
Implications of Increased Auto Tariffs
Increase all new vehicle prices – undermining consumer affordability & dropping demand
Analyses estimate price of a U.S. produced car to increase at least $2,000 and imported car nearly $6,000 as a result
of a 25% tariff on imported autos and auto parts.
LMC Automotive projects an annual sales impact of 1 to 2 million units
Tariffs will depress vehicle exports – the best opportunity for growth in this softening vehicle
market
Automakers invest more than $20 billion in annual U.S. R&D, operate 79 R&D facilities
throughout the U.S.
Partnerships with tech companies like Waymo, Cruise Automation and Uber accelerating the
deployment of Autonomous Vehicles
Tremendous potential for society – safety, reduce congestion, fuel use and expand mobility
Next generation of fuel-efficient powertrains, including hybrids, plug-ins, and electric vehicles
will help meet energy and environment goals
Implications of Increased Auto Tariffs
U.S. in a global race to lead in the R&D of these cutting-edge, future vehicle
technologies
Tariffs will mean less capital for automakers to invest in these technologies
1050
4.45%
3.11%
1000 0.62%
950 -1.20%
-3.34% -3.80%
-3.72%
900
850
-14.05%
800
On August 2, 2018, the Department of Transportation (DOT) and Environment Protection Agency
(EPA) released a Notice of Proposed Rulemaking (NPRM) to Revise Vehicle Fuel Economy
Standards for MY 2021-2026 Vehicles
Agencies largely propose changes to fuel economy standards “to give the American people
greater access to safer, more affordable vehicles that are cleaner for the environment”
Argue that preferred alternative (freeze MY 2020 standards) will result in a per vehicle savings of
$2,340 for consumers
So, while on the one hand, vehicle affordability has been a guiding principle that the
Administration has outlined to justify changes to vehicle fuel economy standards, a 25% auto
tariff will jeopardize affordability by increasing the average price of a new vehicle by $5,000
There’s A Better Way
Understand the desire for a “level playing field” and the need to address bad actors to
make better deals for American workers and families
But, tariffs are the wrong approach and will have the opposite of the intended effect
Better approach is to seek to expand opportunities to grow exports of U.S. made autos
U.S. only has free trade agreements (FTAs) with 20 countries, giving access to roughly 10%
of global market tariff-free
Mexico has FTAs with more than 45 countries, giving manufacturers access to nearly 60%
of the global market tariff-free
Other countries moving on in the global world, leaving the U.S. behind
There’s A Better Way
Modernize NAFTA:
Bring trilateral agreement into the 21st century
In 2017, U.S. shipped $87 billion in autos and auto parts to our NA neighbors
Support modifications to auto rules to origin that continue to strike the right balance
U.S.-EU Bilateral:
Encouraged by July 25th announcement
Autos are 10% of transatlantic trade
Tremendous progress made during TTIP
Should build on that progress and seek opportunities to address tariff and non-tariff barriers