U.S. Legislative Updates

NAFA Weighs in on Administration’s Tariff Investigation of Vehicle Imports

According to the Commerce Department, the Trump Administration is looking to use national security as the basis to consider imposing new tariffs of as much as 25 percent on vehicle and auto-parts imports. To that end, on May 23, 2018, as directed by President Trump, Commerce Department Secretary Wilbur Ross initiated a Section 232 investigation into whether imports of automobiles, including SUVs, vans, light trucks and automotive parts, threaten to impair national security. The Commerce Department has nine months to conduct an investigation and prepare a report on its findings for submission to the President.

In the event action against auto and automotive imports is found to be necessary based on Commerce’s report, the President has the authority to take action to adjust imports of autos and/or automotive parts. The potential remedies available to the President in this context include changing the rate and form of import duties on autos and/or automotive parts without apparent limitation, as well as limiting or restricting autos and/or automotive parts imports, including through the negotiation of an agreement to that effect.

Reaction to the 232 investigations from U.S. trading partners, as well as many sectors of the automotive industry, its trade associations and legislators in high automotive employment states has been negative. General Motors said in response to Commerce’s request for comment that the President’s threat to impose tariffs on imports of cars and car parts could drive vehicle prices up by thousands of dollars.

In response to Commerce’s request for stakeholder input, NAFA submitted comments on June 29 urging Secretary Ross not to impose section 232 tariffs on automotive imports. “A 25 percent tariff on autos and auto parts (and the storm of retaliatory tariffs from our trading partners that would ensue) would upend the industry, destabilizing global supply chains and disrupting U.S. leadership in future innovations on leading-edge technologies – from autonomous vehicles to electrification,” NAFA wrote.

Commerce has scheduled public hearings on the matter for July 19 and 20 and NAFA continues to monitor developments.

 

EPA Proposes Renewable Fuels Volume Requirements

On June 26, the U.S. Environmental Protection Agency (EPA) issued a proposed rule under the Renewable Fuel Standards (RFS) program that would set the minimum amount of renewable fuel that must be supplied to the market in the calendar year 2019, as well as the biomass-based diesel volume standard for the calendar year 2020.

The Clean Air Act requires the EPA to set annual RFS volumes of biofuels that must be used for transportation fuel for four categories of biofuels: total, advanced, cellulosic and biomass-based diesel. EPA says it is using the tools provided by Congress to adjust the standards below the statutory targets based on current market realities. The EPA implements the RFS program in consultation with the U.S. Department of Agriculture and the U.S. Department of Energy.

Some key elements of EPA's action are as follows:

• “Conventional” renewable fuel volumes, primarily met by corn ethanol, would be maintained at the implied 15 billion-gallon target set by Congress for 2019
• The advanced biofuel standard for 2019 would be increased by almost 600 million gallons over the 2018 standard
• The cellulosic biofuel standard for 2019 would be increased by almost 100 million gallons over the 2018 standard
• The biomass-based diesel standard for 2020 would be increased by 330 million gallons as compared to the standard for 2019

The biodiesel industry expressed appreciation for the proposed rule but also renewed concerns over decisions by the EPA to provide numerous waivers to petroleum refiners that release them from their obligations under the RFS, effectively reducing the overall volumes under the program in 2016 and 2017. According to the National Biodiesel Board, those exemptions have effectively reduced current obligations for biodiesel by 100 million gallons in 2016 and 275 million gallons in 2017.

 

House Committee Examines Bosch’s Potential Role in VW Emissions Cheating

The U.S. House Committee on Science, Space, and Technology is currently conducting an ongoing probe into the concealed use of technology to illegally circumvent emissions requirements. In April, the Committee sent a letter to Volkswagen (VW) regarding allegations that VW “continues to circumvent global emissions requirements using stealth technology, despite VW entering into a settlement with the U.S. government for billions of dollars for previous allegations of cheating emissions tests and deceiving customers.” The Committee is now looking into increasing allegations that other automobile companies have similarly concealed the use of technology to control emissions in order to evade and defeat U.S. regulations, and the role that Robert Bosch GmbH (Bosch) has as an auto supplier of critical software controlling emissions.

On June 28, three Republicans on the Committee sent a letter to the German auto parts supplier requesting documents and other information related to the research, development, and technology developed by Bosch to control emissions. VW used Bosch-built electronic control modules and software to form defeat devices that enabled vehicles to deceive emissions tests, say the lawmakers.

"There remain questions about how they could knowingly allow their proprietary software to be manipulated with obvious illegal intent," the lawmakers said in the letter. "As one of the world’s largest auto suppliers, the presence of similar Bosch software on vehicles is concerning.”

The letter also asked Bosch to provide dates in which it would be able to provide testimony in Washington, D.C., as part of a hearing on the use of advanced technologies to circumvent regulations.