President-elect Trump is expected to impose significant tariffs on motor vehicles manufactured abroad, which he has touted as a means to combat what he views as an unfair advantage of foreign manufacturers over domestic car makers.
President-elect Donald Trump has promised to implement sweeping changes to the United States government in his second term across virtually every sector and industry. These changes, which may be facilitated by a Republican-led Congress, could have significant and far-reaching impacts on the transportation industry. While it is impossible to predict with certainty the changes to come, this Alert is intended to provide a high-level overview of some expected changes.
Automotive
Emissions Standards
President-elect Trump is expected to reverse “light-duty vehicle emissions standards,” which were designed to cut emissions standards for light- and medium-duty vehicles by approximately 50 percent. In September, the House of Representatives voted to roll back an Environmental Protection Agency rule strengthening standards for air pollution from car and truck tailpipes. Groups in the trucking industry, including the American Trucking Associations, have expressed support for and optimism toward the incoming administration, stating that it “offers an historic opportunity to build upon [his prior record of prioritizing trucking] … by replacing EPA’s electric-truck rule with national emissions standards that are technologically achievable and account for the operational realities of our essential industry.”
Electric Vehicle (EV) Policies
EV tax credit: President-elect Trump has stated that he would “rescind all unspent funds” in President Joe Biden’s Inflation Reduction Act, which includes many of the Biden administration’s efforts to incentivize EV production such as the $7,500 tax credit for EV purchasers.
National Electric Vehicle Infrastructure (NEVI) Formula Program: President-elect Trump has been critical of the NEVI Formula Program, which is designed to “provide funding to states to strategically deploy EV charging infrastructure and to establish an interconnected network to facilitate data collection, access, and reliability.” The Biden administration pledged $5 billion in NEVI Formula Program funding, but there is an open question of whether the Trump administration will continue to distribute the remaining NEVI funding to EV charging infrastructure deployers.
Tariffs
President-elect Trump is expected to impose significant tariffs on motor vehicles manufactured abroad, which he has touted as a means to combat what he views as an unfair advantage of foreign manufacturers over domestic car makers. President-elect Trump’s tariff plans appear to be in part driven by reports that several Chinese auto companies have indicated a desire to build car manufacturing plants in Mexico to avoid current U.S. tariffs on automobiles made in China.
Autonomous Transportation
It is unclear how President-elect Trump will approach autonomous vehicle policy in his second term. On the campaign trail, he expressed reservations about autonomous vehicles to a Detroit crowd and has been reported to have privately criticized self-driving cars in 2019, stating they “will never work.” On the other hand, the Department of Transportation took significant steps to advance autonomous vehicles during President-elect Trump’s first term.
Rail
Federal Funding for High-Speed Rail
Unlike President Biden, whose administration put billions into Amtrak, high-speed rail, public transportation and the transition to electric vehicles and buses, President-elect Trump has historically favored road and highway expansion projects, and previously attempted to cut funding for Amtrak’s long-distance trains and rescind $3.5 billion in federal funds awarded for California high-speed rail projects.
Safety Regulations
Given President-elect Trump’s prior attempts to deregulate industry, he could roll back certain rail safety regulations. These may include regulations impacting hazardous gas transit and crew member requirements.
Air
Reduction of Enforcement Action
President-elect Trump is expected to continue his first administration’s approach of enforcing only requirements codified in “black and white” statutes and regulations and to not base any action on violations of regulatory guidance or policy.
Mergers, Acquisitions and Competition
We anticipate the second Trump administration to differ from the Biden administration. Under President Biden, the government scrutinized airline mergers and partnerships and the Department of Justice denied the JetBlue-Spirit merger and broke up the JetBlue-American Airlines Northeast Alliance. Some have predicted President-elect Trump’s second term to usher a “breakout year for M&A.”
Consumer Protection
The incoming administration may break away from the Biden administration’s approach of levying heavy fines and imposing strict rules for airlines, compelling them to provide automatic refunds and adhere to enhanced accessibility requirements.
Advanced Air Mobility
President-elect Trump is expected to continue progress on advanced air mobility, a new technology that could “transform our communities by bringing the movement of people and goods off the ground, on demand, and into the sky.”
Air Carrier Access Act
President-elect Trump is anticipated to roll back or stall the Air Carrier Access Act, which would require airlines “to do better in accommodating passengers with disabilities by setting new standards for prompt, safe, and dignified assistance, mandating enhanced training for airline employees and contractors who physically assist passengers with disabilities and handle passengers’ wheelchairs.”
We expect further guidance and clarity over the coming weeks and months leading to President-elect Trump’s inauguration, as well as during his first 100 days.
For More Information
If you have any questions about this Alert, please contact Harry M. Byrne, Alyson Walker Lotman, Daniel G. Selznick, any of the attorneys in our Transportation, Automotive and Logistics Industry Group or the attorney in the firm with whom you are regularly on contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.