Auto Industry News: New NAFTA Faces Stalling as New Tariffs Face Opposition, Musk Scores a Win in Model 3 Stock-Fraud Fiasco, and Bronco Prototype Spells Competition for Jeep

Patience is a virtue. And one we’ll be testing in the upcoming months, as global politics continue to play out in the automotive arena. So as we launch into spring with a fresh outlook and cautious optimism, let’s recap all the drama happening in Washington. Because if you thought any of it had died down, then April Fool’s—the joke’s on you.

As politicians argue that Trump’s new NAFTA won’t pass through Congress until tariffs are off the table, a usually-opposed auto industry joins forces to lobby against new levies being considered by the administration. Elon Musk manages one small victory, as a federal judge takes his side in one-of-many Model 3 stock-fraud lawsuits. And Ford throws down the gauntlet with a Bronco prototype that clearly takes direct aim at the Wrangler.

New NAFTA, New Drama

Despite the agreement Trump made with our North American neighbors while he was negotiating a new NAFTA deal, the United States-Mexico-Canada Agreement (USMCA), cannot be ratified until Congress gives it the stamp of approval. And considering the current lack of friendly unity in Washington, it’s safe to assume that could take some time.

It appears members on both sides of the aisle have their reservations. Many Democrats take issue with an included prescription drug provision tucked into the deal that could hurt generic competition, meaning higher prices for consumers. Others oppose the fair labor provisions that the pact imposes on Mexico, saying they’re too soft and stand little chance of being adequately enforced.

The major sticking point, though? Steel and aluminum tariffs.

According to Bloomberg, “Mexico and Canada have warned they may not ratify USMCA unless the U.S. lifts tariffs on steel and aluminum. The duties are also unpopular with lawmakers from Trump’s own Republican Party.”

Finance Committee Chairman Charles Grassley (R-Iowa) told the Washington Post that as long as the tariffs remain, nothing will happen. “The tariffs come off if he wants to get a win.”

The administration is hoping for passage before the August recess. Any further stalling could pose a problem to Trump’s 2020 presidential campaign. However, with the Democrats holding the House—and Trump’s good friend Nancy Pelosi determining if the new NAFTA deal even gets put on the floor—we may be waiting a while.

Strength in Numbers

Auto execs seem to support the new NAFTA deal, feeling it will boost North American manufacturing and bring more certainty to the market. While it will undoubtedly raise new vehicle prices, the overall consensus seems to be that higher production costs can be mitigated with some new supply chain strategies.

But as some concessions can be swallowed in favor of long-term gains, others simply raise alarm bells. Mouthpieces from all facets of the auto industry are descending upon the Capitol, pleading with Congress members over steep new tariffs the Trump administration may levy on imported cars and parts.

“Nobody in the auto industry supports a 25 percent import tariff, unlike in the steel and aluminum tariff situation where you had the steel industry advocating for relief,” Jennifer Thomas, VP of Federal Affairs at the Alliance of Automobile Manufacturers told Bloomberg News. Her advocacy group acts on behalf of dozens of automakers, who feel these new tariffs will do more damage to an industry already suffering from falling auto sales and rising vehicle prices.

New tariffs could see imported vehicles adding nearly $7k onto their asking price. And domestic vehicles wouldn’t be excluded either, as the Center for Automotive Research reports they could see a $2,270 jump in price. Maintenance costs would rise, as replacement parts go up. Factories would cut back on production, resulting in layoffs. And undoubtedly, other countries would respond with their own retaliatory tariffs—as we’ve already seen play out.

Supporters argue that a threat of new tariffs is just a tactic. One that Trump is using to keep China, Japan, and the EU on their toes during trade talks. That might be true (and it might even pay off), but in the meantime, we’ve got a jumpy and impatient auto industry making multi-million-dollar market decisions.

One Model 3 Stock-Fraud Case Down… Many, Many More to Go.

Speaking of multi-million-dollar markets… It looks like our old friend Elon Musk has dodged a bullet. Last week, a federal judge in San Francisco dismissed a class-action lawsuit against the entrepreneur in the swirling poop-storm of Model 3 stock-fraud and SEC violations.

For a refresher: The suit, filed by Tesla shareholders, alleged that Musk intentionally made misleading statements on Twitter about Model 3 production. His tweets sent Tesla stock soaring, only to drop when it was discovered that Musk did not, in fact, have “funding secured.”

Musk settled with the SEC—coughing up $40 million, stepping down as chairman, and agreeing to get ‘permission’ before he made any more expensive Tesla-related tweets. (A condition the feds are now saying Musk violated with another tweet in February. Although, it’s looking like he’ll dodge that one, too.)

But the settlement hasn’t stopped angry shareholders from trying to squeeze some pennies from the EV manufacturer—who is currently in the red thanks to issues taking the Model 3 to market. Interestingly, it’s that very production woe that seems to have saved Musk’s behind in court. According to Reuters, “[U.S. District Judge Charles Breyer] wrote that the allegations of fraud ignored Tesla’s “repeated warnings about Model 3 production risks.”

The hoopla surrounding Musk’s Twitter feed doesn’t seem to be slowing him down, as this weekend was full of strange meme jokes and a new rap single…?

Ford Takes Aim at Jeep with New Bronco Prototype

Apparently, Ford doesn’t need a diss track to throw shade at the Almighty Jeep Wrangler. Instead, the Blue Oval let its new Bronco prototype do the talking. According to Automotive News, Ford unveiled an early version Bronco at a recent meeting of top-selling dealers last month. Sporting a retro design with a 2-door configuration, the Bronco prototype has made it clear it intends to challenge the Wrangler directly—and on its own turf. Capitalizing on some of Jeep’s disadvantages, the new Bronco will offer A-pillar mounted side mirrors and on-board storage of the removable hard top and doors.

Sources told Automotive News that the automaker “described its off-roaders as a family of vehicles,” including a two- and four-door Bronco, a smaller ‘Baby Bronco’ and an unnamed small unibody pickup truck.

Seemingly always a step ahead though, FCA will be putting its new Jeep Gladiator on lots hopefully as early as this Spring. The move should grab plenty of hungry shoppers too impatient to wait around for Ford’s new Bronco family lineup.