USA First Look

Trump tells US automakers he will ease 'out of control' environmental restraints

President Trump met with the top leaders of the US auto industry Tuesday, assuring them that he would lift some environmental regulations and facilitate the construction of plants in the US.

President Donald Trump greets General Motors chairman Mary Barra as he hosts a meeting with US auto industry CEOs at the White House on January 24, 2017.
Kevin Lamarque/Reuters
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Speaking with executives from the nation's biggest automakers on Tuesday, President Trump pledged to scale back environmental regulations and make it less complicated to open new assembly lines on US soil.

The comments come as Mr. Trump aims to transform his track record of case-by-case dealings with private business leaders into the standardized policy of his nascent administration. Although his comments raised concerns among environmentalists and some economic observers, they received a warm welcome from business leaders promoting a push to hire Americans and buy American-made goods.

"Our friends that wanna build in the United States, they go many, many years and then they can't get the environmental permit over something that nobody ever heard of before," Trump said during the roundtable with General Motors, Ford, and Fiat Chrysler, as Politico reported. "And it’s absolutely crazy. I am, to a large extent, an environmentalist. I believe in it. But it’s out of control."

Trump said his team would take steps to restore manufacturing jobs, cut taxes, and pare back unnecessary regulation.

"We want regulations, but we want real regulations that mean something," he added.

The news has been greeted with a range of reactions, with some warning that Trump could be heading down a dangerous path, but the executives in the room offered positive reactions following their meeting – a sign that leaders of American industry are, at least for the time being, looking to work with the new administration.

"We had a very constructive and wide-ranging discussion about how we can work together on policies that support a strong and competitive economy and auto industry, one that supports the environment and safety," said Mary Barra, chief executive officer of GM, in a statement describing the US as "our home market."

"We all want a vibrant US manufacturing base that is competitive globally and that grows jobs. It's good for our employees, our dealers, our suppliers, and our customers," Ms. Barra added.

Trump had met Monday with business leaders from a number of industries, including Ford's chief executive Mark Fields and Elon Musk, chief executive for Tesla Motors Inc. and Space Exploration Technologies Corp. (better known as SpaceX) – outlining plans to drastically cut corporate taxes while stopping manufacturers from offshoring American jobs.

"I come out with a lot of confidence that the president is very, very serious about making sure that the United States' economy is going to be strong and have policies on tax, regulatory, or trade to drive that," Mr. Fields told reporters after Monday’s meeting, as The Washington Post reported. "That encourages all of us as CEOs as we make decisions going forward. It was a very, very positive meeting." 

These meetings come after Trump has repeatedly criticized US automakers for operating production lines in Mexico and other countries with cheaper labor, often calling individual companies out by name on Twitter and threatening to impose a border tax.

It remains unclear whether the possible tariff proposal was discussed during the meeting, but Trump has repeatedly said he wants to renegotiate the North American Free Trade Agreement (NAFTA) to protect American workers from losing their jobs to a global workforce. The executives praised Trump's decision Monday to withdraw from the Trans-Pacific Partnership (TPP) as beneficial for the US auto industry.

While some are optimistic that Trump's approach will reap rewards for the US economy, others worry it could wreak havoc instead. Matthew DeBord, transportation editor for Business Insider, wrote that the automakers could bring about "disaster" if they follow Trump's lead.

"The problem is with Trump's demands regarding capital expenditure and hiring. The automakers would have stood a decent chance of getting a rollback on regulations with any Republican president, but the protectionism Trump is pushing for runs counter to their businesses," Mr. DeBord wrote.

The recent boom in US auto sales – a record number of new vehicles, more than 17.5 million, were sold last year – was built on cheap gas and easy credit, enabling Detroit to sell trucks and sport utility vehicles. But the boom is showing signs of softening, which is why major automakers have been looking to shift to smaller and cheaper cars produced in Mexico, prompting Trump's criticism, DeBord added.

"If they give into Trump and start building new factories and hiring new workers in a peaked market," he added, "the capital will be wasted because the capacity will never be needed and the jobs will vanish in a downturn."