Howes: With Trump's economic plan, the only consistency is inconsistency
Not since two Detroit automakers emerged from bankruptcy a decade ago has the hometown industry faced as much uncertainty as they do now in President Donald Trump's Washington.
Chaos on tariffs and trade, emissions standards and self-driving vehicle legislation. It conjures an F-word that hasn’t been used to describe the industry in recent years in recent years: And that word is “fragile.”
Business conditions don’t help. Softening sales, especially in China, are intensifying market headwinds. And transaction prices are rising, which puts once-affordable models out of reach for a growing number of customers.
At the same time, the automakers need to make money to fund next-generation technology that may or may not pay off.
President Trump’s multi-front tariff battles with Mexico, Canada, China, and the European Union remain mostly unresolved. Trump’s replacement for the North American Free-Trade Agreement – a core promise of his first campaign – shows few signs of making it through a Democratic House.
The White House also is intensifying its fight with California and a dozen more states over proposed rollbacks to Obama-era emissions rules.
The Obama administration and its friends in the environmental lobby assumed there would be higher fuel prices, greater demand for electric vehicles and less demand for pickups and SUVs. It didn’t work out that way. Seven years on, gas is closer to two bucks a gallon than four, trucks and SUVs claim a bigger share of the U.S. market than ever before, and non-traditional powertrains aren’t gaining traction with consumers.
Caught in the middle of this mess are foreign and domestic automakers. Their first obligation is to produce products real people really want -- not what politicians, regulators, and activists want them to buy. Automakers worry that protracted litigation over emission rules would create two standards in the United States and two markets that could be easily gamed across state lines.
Better to push for a single standard and reap the potential PR benefit with would-be buyers than defy the president by siding with California.
The bottom line is that Trump’s incoherent policy-making is a) exhausting and b) revealing a world view that is consistent only in its inconsistency.
Congress isn’t much better. A package establishing new federal rules for self-driving cars remains stuck in committee, even as the industry and its tech rivals push ahead with efforts to develop autonomous vehicles.
It’s tempting to say this can’t last. That Trump’s tariffs tirades, his failure to deliver promised trade deals, his intermittent badgering-by-tweet of automakers are all undermining whatever political cred he has with lunch-bucket workers whose livelihood is affected by his policy gyrations.
Yes, the state of the automotive union – the backbone of the Michigan economy – is fragile. The only consistency is inconsistency, and that’s what automakers have to manage.
Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.