Trump summons auto execs for talks on trade, jobs
Washington — President Donald Trump is moving quickly to fulfill campaign promises to reverse course on trade agreements he says are ruining the nation’s economy.
Trump signed an executive order Monday that calls for the U.S. to withdraw from the Trans-Pacific Partnership trade deal, and he is calling the leaders of Detroit’s automakers to Washington for a Tuesday breakfast meeting.
White House Press Secretary Sean Spicer said Trump “looks forward to hearing (carmakers’) ideas about how we can work together to bring more jobs back to this industry in particular.”
"I want new plants to be built here for cars sold here!" Trump tweeted Tuesday morning, ahead of the meeting.
The flurry of activity on Monday came after Trump said Sunday he will begin talks with the leaders of Mexico and Canada to renegotiate the North American Free Trade Agreement. The new president would have to give the countries six months’ notice of his intent to withdraw from the 1994 agreement.
Trump called his move to withdraw from the Trans-Pacific Partnership “a great thing for the American workers.”
The trade agreements are certain to be a topic of discussion Tuesday when he meets with the heads of Detroit’s Big Three: Ford Motor Co. President and CEO Mark Fields, General Motors Co. Chairman and CEO Mary Barra and Fiat Chrysler Automobiles NV CEO Sergio Marchionne.
It is telling that the president has called the heads of U.S. automakers to Washington for a meeting on the second business day following the inauguration. During his campaign and since then, Trump has singled out auto manufacturers for building cars in Mexico. Ford in particular has been a frequent target for Trump, who has criticized the Dearborn company on multiple occasions for its decision to shift small-car production to Mexico.
Ford announced days before Trump took office that it is canceling plans to build a $1.6 billion plant in San Luis Potosi, Mexico, and will invest $700 million at its Flat Rock Assembly Plant, creating 700 new jobs there. The Dearborn company had planned to ship production of the compact Focus from the Michigan Assembly Plant in Wayne to the San Luis Potosi plant, which had begun some initial construction.
Trump proposed a 35 percent import tariff on Mexican-made vehicles during his campaign.
Press secretary Spicer did not say what topics would be discussed Tuesday.
Ford CEO Fields also attended a Monday breakfast meeting of business leaders with Trump, including heads of two other Michigan-based companies: Whirlpool Corp. Chairman and CEO Jeff Fettig and Dow Chemical Co. Chairman and CEO Andrew Liveris.
Fields called the Monday meeting “very, very positive.”
“Walking out of the meeting today, I know I come out with a lot of confidence that the president is very, very serious on making sure that the United States economy is going to be strong and have policies, tax, regulatory or trade to drive that,” Fields said. “And I think that encourages all of us as CEOs as we make decisions going forward.”
Ford said Monday that it has been “vocal in advocating for changes to TPP because it did not sufficiently address currency manipulation.”
Liveris said they talked in the Monday meeting about the idea of a border tax “quite a bit.”
“I would take the president at his word here. He’s not going to do anything to harm competitiveness,” Liveris said. “He’s going to actually make us all more competitive.”
Trump later told about a dozen labor leaders — not including the United Auto Workers — that he is redoing the nation’s trade deals “to put a lot of people back to work.”
The meeting included representatives for the United Brotherhood of Carpenters, the Building and Construction Trades Department, the Laborers' International Union, the United Association, the Steamfitters United Association, the United Brotherhood of Carpenters, the Ironworkers, the Sheet Metal Workers’ Union/SMART Union and the Heat and Frost Insulators and Allied Workers, according to the White House.
Auto companies have expressed optimism that Trump will create a more friendly business climate for them and roll back regulations that were put in place by the administration of former President Barack Obama. The new president has named three automotive executives — GM’s Barra and Uber Technologies CEO Travis Kalanick and Tesla Motors Inc. CEO Elon Musk — to a Strategic and Policy Forum that he has said will frequently will advise him on economic issues and jobs growth. Musk also was present at Monday’s breakfast meeting.
The Trans-Pacific Partnership is a 12-nation trade deal that includes the U.S. and several Asian countries designed lower tariffs in the Pacific, Asia and the Americas. Supporters have said pulling out of the TPP would leave the U.S. out of 40 percent of world trade.
The agreement would create special rules for the trade of autos, agricultural, textile and apparel products — which have emerged as politically sensitive industries.
Until the TPP became a hot-button issue in the presidential campaign, the trade deal had wide support among Republicans. It was one of the few issues for which the GOP had a common ground with Obama. Democrats largely opposed the deal.
On Monday, U.S. Sen. John McCain, R-Ariz., broke ranks with the new position of his party. He said the decision to formally withdraw from the TPP is a serious mistake that will have lasting consequences for America’s economy and its strategic position in the Asia-Pacific region.
“This decision will forfeit the opportunity to promote American exports, reduce trade barriers, open new markets and protect American invention and innovation,” McCain said in a statement. “It will create an opening for China to rewrite the economic rules of the road at the expense of American workers. And it will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it.”
U.S. Sen. Debbie Stabenow, D-Lansing, has introduced legislation to require Trump to withdraw from the TPP. “This trade deal doesn’t crack down on countries that manipulate their currency or enforce protections for American jobs,” she said in a statement.
NAFTA was enacted in 1994 to create a free trade zone between the U.S., Mexico and Canada that eliminated tariffs on most goods produced in North America.
Canada is Michigan’s biggest trading partner, with the state exporting $23.5 billion in goods there in 2015, according to the U.S. Department of Commerce. Shipments to Canada accounted for nearly 44 percent of Michigan’s exports. Mexico, meanwhile, was the state’s second-largest trading partner with $11.7 billion in exports in 2015, which accounted for about 22 percent of the state’s exports.
Canadian Prime Minister Justin Trudeau spoke to Trump over the weekend, according to Trudeau’s office. “The prime minister and the president reiterated the importance of the Canada-United States bilateral relationship, and discussed various areas of mutual interest,” the prime minister’s office said a statement. “The prime minister noted the depth of the Canada-U.S. economic relationship, with 35 states having Canada as their top export destination.”
Hoyt Bleakley, an associate professor of economics and research associate professor at the University of Michigan’s Population Studies Center, said “the new administration is suggesting a reversal in trade policy of a magnitude that hasn’t been seen in decades, possibly since the 1920s.”
He said there are risks to Trump’s protectionist approach. “A sudden increase in trade costs is a recipe for a slowdown, maybe a recession, as the higher costs disrupt the supply chain,” Bleakley said Monday.
He added: “Mexico is now so heavily integrated into North American manufacturing that a large increase in the cost of cross-border transactions would make many U.S. manufacturers significantly less competitive both at home and abroad.”
klaing@detroitnews.com
Staff Writers Melissa Nann-Burke and Ian Thibodeau contributed.