Automotive Purchasing and Supply Chain - page 3

What does a Trump
presidency mean for
the North American
auto industry?
Sam Ogle
Peter Wooding
Simon Duval Smith
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In this, my rst Editor’s Note
since the electoral triumph of Donald
Trump, I wonder how his accession to
power will affect the North American
auto industry, given his right wing
stance and the similar views of his
cabinet members announced thus far
at the time of writing.
The western world is moving to
the right. The victories for Trump, the
UK Brexiteers and the emergence
of Marine Le Pen as a credible
candidate in the French presidential
election would all indicate so. The
new US administration will arguably
be the most right-wing since that of
Richard Nixon. One of Trump’s rst
pledges was to invest in American
infrastructure, something which is
badly needed, as anyone who has
recently driven on US freeways will
agree. Infrastructure investment
is also a job creator, and will go
down well with Trump’s blue collar
It is Trump’s stance on NAFTA,
the North American Free Trade
Agreement, and the tearing-up of the
Trans-Paci c Partnership, the largest
regional trade accord in history, which
are exercising far more automotive
minds. Trump frequently criticised
NAFTA during his electoral campaign,
proclaiming it to be the worst deal
ever and responsible for multiple
American job losses. In particular,
his diatribes against Ford Motor
Company, whose crime in his eyes
was to build vehicles in Mexico, and,
more recently, his coercion of Carrier
Corporation to abandon plans to
move operations south of the border
have grabbed headlines. During
his campaign, Trump threatened to
impose swingeing tariffs of up to 35%
on imported products of companies
relocating production away from the
US. NAFTA has been a lifeline to the
Mexican economy since it was signed
into being, ironically by President
Bill Clinton in December 1993. Since
2010, nine global carmakers have
opened plants in Mexico with a total
investment of over $24 billion. A
presidential attempt to micromanage
the affairs of American companies is
not, at least to this writer, something
to be welcomed.
Trump’s appointment of a
prominent climate change sceptic to
head up the Environmental Protection
Agency, allied to his own comments
during his election campaign, has led
to much speculation about whether
US fuel economy regulations might be
relaxed. Were this to happen, it would
bene t those manufacturers which
still rely heavily on conventional
internal combustion engines, but
would y in the face of what is
becoming accepted practice in many
other countries.
Truly, we live in interesting times.
Sam Ogle
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