Trump’s battle with automakers over California’s emissions standards is completely pointless

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A dispute between the Trump administration and California over the state’s auto emissions standards has reached an impasse.
The automakers, who don’t want to build cars for two markets, are caught in the middle.
This battle isn’t about who will win, because all the automakers can do is lose. Instead, it’s about Trump’s addiction to pointless political theater and destructive economic policy.

The US auto industry has been struggling for months to get the Trump administration to relent in a battle with California over emissions standards, seeking to eliminate the state’s longstanding power to set it own rules.

But now the administration has declared that it’s our way or else, walking away from negotiations. The auto industry, and American consumers, are the losers: the industry because it could have to waste money building cars to a dual US standard; and consumers because they’ll be denied more economical, technologically advanced vehicles.

This is all so Trump can curry favor with a tiny number of voters who don’t care about the outcome but just want to see Trump trigger the libs on the West Coast.

"The White House has issued an us-versus-them challenge to carmakers: back an administration plan to roll back
fuel-economy standards or risk President Donald Trump’s wrath by siding with California’s stringent emissions requirements," Bloomberg’s Ryan Beene reported.

This is a nightmare scenario for automakers.

California has long held a waiver from the EPA to set it own, more aggressive emissions targets, and 13 other states have followed. Car companies are comfortable with this arrangement because it means that the majority of vehicles produced use the California standard. With the existing rules, they also know how to allocate the billions the invest in long-term, new-vehicle development.

What they fear is the emergence of a dual national standard that would effectively mean that they have to build one batch of vehicles for California’s markets, the largest in the US, and another for the states that don’t hew to the tougher standard.

Rebecca Cook/Reuters

A fight that only Trump wants

No one in the auto industry wants this fight. They were happy to see Trump’s EPA reopen a review of Obama-era federal fuel-economy goals that was closed — in fairness, prematurely — in late 2016, before Trump took office.

But a quick deal with the new President later led to the present chaos, as California took a defiant stance toward a revocation of its waiver and the car companies realized that the administration was pushing beyond the earlier bargain.

The carmakers were caught in the middle. These are conservative companies that strenuously avoid this kind of battle.

Worse, they understand that the whole thing isn’t about some injustice that California is imposing on the rest of country; the Golden State has been dealing with smog problems since the middle of the 20th century, and the waiver dates to the Clean Air Act of 1970. Automakers have been living with California’s de facto national standard for literally decades. It’s baked into their entire, multi-trillion-dollar business.

But business isn’t why the administration is picking this fight. It’s all about California’s role as gigantic center of Trump opposition.

Welcome to Trumpian nationalistic socialism

Andrew Harnik/AP

It’s hard to determine why Trump has stuck with this dustup for so long. Trolling California, which accounts for around 15% of total US GDP, is going to fail. Californians love their environment and will fight well past the bitter end to preserve their waiver.

Messing with the auto industry, one of the few that can hire prospective Trump voters in Midwestern swing-states in serious numbers, is also pointless.

The only explanation for Trump doing this that it fits into the administration’s addiction to chaotic theater.

Trump seems set on preventing California from taking away your gas-guzzling pickup, which California wasn’t going to do. And besides, most pickup trucks owners seem to like newer, more fuel efficient pickups — Ford sold close to a million F-150s in the US last year, many with smaller, cleaner engines.

The auto market in the US has been well-understood by its participants since the 1980s. A combination of tacit partnership with California and relentless competition has provided American consumers with more choice and better pricing than in any other car market on Earth.

It’s a near-perfect example of how democratic market capitalism, regulated but robust, is supposed to work. So obviously, Trump needs to screw it up.

This is an opinion column. The thoughts expressed are those of the author.

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Source: Business Insider – feedback@businessinsider.com (Matthew DeBord)