U.S. Legislative News

Additional Tariffs on Goods from Mexico Averted

On May 30, President Trump announced that on June 10, 5% tariffs would be applied to all goods being imported to the U.S. from Mexico. The president stated that the tariffs would increase on June 1, to 10% and after that increase by 5% each month, up to a high of 25% on October 1, unless the illegal immigration problem at the U.S. southern border was remedied. The action sent shockwaves through the U.S. and Mexican markets, as the tariffs would touch nearly every sector and industry in the U.S. economy.

However, on June 7, the U.S. and Mexico released a joint declaration announcing that they had come to an agreement to take on additional actions to curb illegal immigration at the U.S. southern border. The agreement resolved the threat of additional tariffs on Mexican imports but has left many concerned about the use of tariffs as a bargaining tactic in the future and the impact it may have on other negotiations, such as the USMCA. Automakers were particularly troubled over the potential Mexico tariffs, with major stakeholders such as Ford citing the potential impact on the cost of vital components and vehicles they manufacture in Mexico. If the Trump administration enforced the full 25% tariff, it would increase the price of vehicles sold in the United States by an average of about $1,300 according to an auto analyst for Deutsche Bank.

Senate Finance Committee Seeks Input from Fleets for Energy Tax Credit Taskforce

The U.S. Senate Finance Committee recently formed several issue taskforces to take a critical look at expired and soon-to-expire temporary tax provisions, such as the alternative fuels and biodiesel tax credits that expired at the end of 2017.

In the beginning of June, NAFA was asked by the taskforce to provide real-world stories of how fleets in their states have used the $0.50 per gallon alternative fuel tax credit for compressed natural gas, liquefied natural gas, propane autogas, and other alternative transportation fuels, the $1.00 per gallon tax credit for biodiesel, and the 30% alternative fuel infrastructure tax credit. The committee is accepting these comments this month, as they review the credits.

If your fleet has historically utilized any of the fuel-related tax credits, it would be a significant help if you could please take a moment to send an email to NAFA to let us know which credits you have used and how the savings have helped your organization.

EPA Publishes E-15 Summertime Sale Regulation

On June 10, the Environmental Protection Agency (EPA) published its finalized rule allowing for gasoline blended with up to 15% percent ethanol (E-15) to be sold during the summer months. Oil industry stakeholders are expected to present legal challenges to the new rule, as they believe classifying E-15 as substantially like conventional E-10 gasoline is without merit. The rule is being welcomed by those in the ethanol and agricultural industries given the expectation that it will increase the demand for the higher ethanol blended fuel, and lead to more widespread adoption. NAFA and other stakeholders have warned of greater risk of potential misfuelling errors and damage to engines and underground fueling systems from the use of E15.

Senator Harris Introduces Bill to Help Electrify U.S. School Bus Fleets

On June 5, Sen. Kamala Harris (D-Calif.) introduced the Clean School Bus Act (S. 1750), to assist school districts around the country in replacing traditional diesel school buses with electric school buses.

The bill would provide grants of up to $2 million to replace diesel school buses with electric school buses, invest in charging infrastructure, and support workforce development, with priority given to applications that serve lower-income students, and replace the most polluting buses. The bill would also authorize $1 billion over five years at the Department of Energy to fund a Clean School Bus Grant Program to spur increased adoption of this clean technology. The bill seeks to make an impact on greenhouse gas emissions and is supported by several environmental and public health advocacy stakeholder groups.

White House Refuses to Renegotiate with California on Emissions Standards Despite Calls from Auto Industry

On June 6, 17 automakers sent a letter to President Trump expressing the need for a unified national standard on vehicle fuel economy and emission regulations that are adhered to across all 50 states. The Administration is expected to release the updated Corporate Average Fuel Economy (CAFE) and Greenhouse Gas (GHG) Emissions Standards in the coming months. However, they failed to come to an agreement with California on appropriate standards. California has threatened to enact even tougher standards, which would likely then be adopted by the dozen other states that adhere to California’s rules.

Automakers expressed that failing to reach a unified national standard could destabilize the industry and hamper investment. However, White House spokesman Judd Deere responded to the letter, saying that California had “failed to put forward a productive alternative, and we are moving forward to finalize a rule with the goal of promoting safer, cleaner, and more affordable vehicles.”

This last-ditch effort by the auto industry to prevent a regulatory patchwork underscores the potential challenge the industry is facing. With certain cost implications involved in manufacturing state-specific vehicles, there is a strong likelihood of these costs being passed on to consumers. NAFA supports unified national CAFE and GHG standards that encourage sustainability and auto industry stability.