capital report: dec. 10, 2019

Congress Reaches Deal on USMCA

Congress and the White House have come to an agreement on the United States-Mexico-Canada Agreement (USMCA), all but ensuring the President’s free trade pact will be finalized. The agreement, which was initially negotiated by the three North American nations more than a year ago, will now include stronger labor and environmental enforcement provisions, at the request of House Speaker Nancy Pelosi, D-Calif., and House Democrats.

Representatives from the U.S., Mexico and Canada have traveled to Mexico City to sign the compromise agreement, which will then be voted on by each country’s legislature. Speaker Pelosi has informed her colleagues that she expects to schedule a vote in the House for some time next week.

The changes pertaining to autos and auto parts remain intact. Seventy five percent of a new vehicle’s content must come from North America in order to receive duty-free treatment, up from the current 62.5% under NAFTA. Further, as of 2020, 30% of auto manufacturing must be completed by workers in the U.S., Canada and Mexico earning a wage of at least $16 per hour.

The U.S. International Trade Commission (USITC) reported earlier this year that despite an expected drop in new vehicle sales due to the new rules of origin, the USMCA is expected to increase U.S. GDP by 0.35% and create 176,000 jobs in the long run.

Questions? Contact Brielle Hopkins.


Right to Repair 2.0 Headed to 2020 Ballot in Massachusetts

On Dec. 4, the Massachusetts Right to Repair Coalition announced the collection and submission of 102,000 signatures, which are required for new Right to Repair language to appear on the 2020 ballot. This new language will ensure that real-time diagnostic and repair information transmitted wirelessly will be made available to car owners, who then may grant access any repair shop, dealer or automaker of their choosing.

The coalition had been pushing for bipartisan legislation filed this year in both state chambers and co-sponsored by 55 legislators; however, due to a lack of progress, the coalition had decided to once again bring the issue before Massachusetts voters. In 2012, the coalition passed compromise Right to Repair legislation and achieved 86% support for the issue at the ballot.

Questions? Contact Aaron Lowe.

Read the release:


Trump vs. California: Auto Emissions Lawsuit Heats Ups as Administration Asks Court to Throw Out Lawsuit

In court papers made public on Dec. 3, the Trump administration’s lawyers called for a U.S. District Court judge to toss out a lawsuit brought by California and 22 other states over auto emissions rules that would force automakers to adopt higher fuel economy standards for their vehicles. While California was granted the ability by the Obama administration in 2009 to set stricter emissions regulations, last year, Trump revoked that authority, prompting a lawsuit brought in federal court by the states along with Washington, D.C., New York City and Los Angeles.

Political reasons notwithstanding, the administration’s legal rationale for revoking California’s authority relies on the notion that by setting stricter emissions regulations for vehicles, the state is thereby imposing stricter fuel economy rules, which are supposed to set nationally by the National Highway Traffic Safety Administration (NHTSA). California and the other parties to the lawsuit obviously disagree, claiming that they have always had the right to regulate air quality within their borders.

An additional component to the administration’s argument relates to whether this case belongs in the U.S. Court of Appeals as opposed to trial-level District Court.

Automakers are split on the White House’s strategy. Some, including General Motors and Fiat Chrysler, have endorsed the president’s decision to revoke California’s authority, while others, including Ford, Volkswagen, Honda and BMW, have reached an agreement with California to voluntarily adhere to stricter emissions and fuel economy standards.

Questions? Contact Aaron Lowe.


Trump Announces Tariffs on Steel and Aluminum from Brazil and Argentina

Last week, President Trump announced via Twitter that Section 232 tariffs on steel and aluminum imports from Brazil and Argentina would take effect immediately, reversing course from the administration’s June 2018 decision to impose quotas on these two countries instead of tariffs. Understandably, there is much concern from the steel market over this news, as there are shipments awaiting delivery to the U.S. and orders have already been placed for early 2020. However, as of today, this action had not yet been made official as there has been no formal announcement from the White House, adding even more uncertainty.

This announcement comes shortly after a court ruled that the president could not increase Section 232 tariffs at any time and instead must follow the timeline put in place by the Section 232 statute. The president had attempted to double Turkey’s steel tariff from 25% to 50%, but because he did so outside of the 90-day window following the Section 232 report, the U.S. Court of International Trade ruled that he did not have to power to increase the tariff.

Questions? Contact Brielle Hopkins.


ACPAC Wrapping Up 2019 with Strong Support at AAPEX

At this year’s AAPEX in Las Vegas, Nev., the Auto Care Political Action Committee (ACPAC) thanked its members for their generosity in 2019 with exclusive events and perks, while also raising nearly $30,000 leading up to and on-site at the event. ACPAC hosted the AWDA crowd with a margarita reception and further thanked its members at AAPEX with daily to-go lunches in the ACPAC Lounge. Also, Presidents Club donors were able to meet with and obtain an exclusive photo with former president George W. Bush, the featured speaker at the Opening Session. ACPAC’s main focus is to support our allies on Capitol Hill, but it is important that we recognize the significant investment members of the Auto Care Association continue to make year after year.

The more than $280,000 raised by ACPAC in 2019 is a reflection of the auto care industry’s commitment to its future. However, it is important to remember that 2020 is an important election year and our allies will need dollars early in the year to ward off opponents and be able to get their message on the airwaves. ACPAC dollars support the campaigns of members of Congress who support and understand our issues. These funds also provide unique opportunities for our lobbyists to get in front of new lawmakers and explain how issues like tariffs and vehicle data affect aftermarket businesses. As demonstrated by the increased tariffs on auto parts and the growing concern over access to in-vehicle data, it is important that our industry not sit on the sidelines as decisions are made in Washington. Our lobbying efforts, coupled with a strong political action committee, help us be heard in Washington.  ACPAC speaks for the industry with one loud voice and together, we will be heard.

Contact Hailey Ray to learn more.


Get the Latest Coverage of the 2020 Elections

Thanks to support from the Auto Care Political Action Committee (ACPAC), we are pleased to bring Capital Report readers the latest Inside Elections with Nathan Gonzalez, a bi-monthly nonpartisan analysis of U.S. elections.

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