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Howes: Trump is displaying a "pretty incredible ignorance" about how modern auto industry works

Jan 12, 2017

There's been something besides the shiny new cars, SUVs and trucks grabbing attention this week at the North American International Auto Show.

That something is the uncertain future for the auto industry under incoming President Donald Trump.

Detroit News business columnist Daniel Howes joined Stateside to talk about some of the anxiety that exists in the auto industry and what some experts are saying about a potential repeal of NAFTA (North American Free Trade Agreement)

Howes quoted Chrysler Fiat CEO Sergio Marchionne in a recent column when he said:

"This is new territory for most of us. None of us have had a tweeting president. It’s a new form of communication."

Trump's tweeting has put not just auto executives on edge, but other industries as well. Many of them don't want to speak publicly because they don't want to feel the (digital) wrath of the president-elect's Twitter account.

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According to Howes, Trump has taken credit for investment decisions that General Motors, Ford, and Fiat Chrysler made, on average, two to four years ago.  

"Whether intentionally or not, [Trump is] displaying a pretty incredible ignorance about how the modern [auto] industry works," said Howes.
 

Unless this president can repeal the laws of market economics, companies are going to go elsewhere to find production sites and sources for things

Howes' most recent column highlights a report out of the Center for Automotive Research that says Trump's plan to repeal NAFTA would not be a job-friendly move for the American economy.

According to the study, they estimate that a repeal of NAFTA and a sharp increase in border tariffs, could cost as many as 31,000 jobs. Southeastern Michigan would be hit especially hard due to the massive exporting and importing that is done to Canada and Mexico.

If tariffs are raised to products imported from Mexico, then Mexico would likely retaliate with their own tariffs, which could ultimately cost American consumers.

In the end, Howes said that taking a hard line on American businesses making products in foreign countries is a no-win situation.

"Unless this president can repeal the laws of market economics, companies are going to go elsewhere to find production sites and sources for things," said Howes.

Listen to the full interview to hear why some in the auto industry are optimistic due to some of Trump's cabinet and more on why repealing NAFTA is a bad idea.