U.S. Auto Industry Will Ask Trump for Relaxed Regulations Covering Trade and Fuel Efficiency

The U.S. auto industry is set to pursue its agenda with an incoming president broadly critical of government policies, aiming to roll back at least some regulations imposed during the past eight years of the Obama administration.

Among the industry's top targets most likely will be federal Corporate Average Fuel Economy (CAFE) standards, which rise to a 54.5 mile-per-gallon fleet average by 2025, a level that General Motors (GM) and other automakers worry may not be achievable.

President-elect Donald Trump, who has criticized trade policies and expressed skepticism about policies designed to slow global climate change, could agree to take steps --perhaps in conjunction with the U.S. Congress -- to set new, lower fuel-efficiency targets. The government also could revisit financial incentives to stimulate demand for battery-powered electric vehicles, solar and other energy technologies meant to replace fossil fuels.

"As car prices rise, it becomes vital to look at the full cost of regulatory initiatives," said Mitch Bainwol, chief executive of the Alliance of Automobile Manufacturers, in a letter to the Trump transition team. "Well-meaning regulatory action risks increasing compliance costs to the point that additional safety and fuel-efficiency technologies put new vehicles out of financial reach of the average new car purchaser."

During the election campaign, Trump criticized Ford (F) for the loss of jobs in the U.S. in connection with the automaker's plan to transfer production of small cars to Mexico, a country where production costs are lower than in the U.S.

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