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International Trade

Total U.S. exports for 2014 are $1.62 trillion. Automotive products represent 8.70% of that total, or more than $140 billion in 2014. Automakers and suppliers are America’s largest exporters, beating the next best performing manufacturing sector by more than $80 billion over the past 5 years. In 2013 alone, FCA US, Ford and General Motors exported nearly 1 million American-made vehicles to more than 100 different foreign markets.

Top Five U.S. Exporters (2014, in billions)


As America’s largest exporters, FCA US, Ford and General Motors have supported every U.S. free trade agreement ratified. These agreements have reduced tariffs and eliminated numerous non-tariff trade barriers in key markets. The Trans-Pacific Partnership (TPP) could generate similar benefits for U.S. exporters, but only if key issues are addressed:

  • Eliminate all auto non-tariff barriers in all TPP-member countries.
  • Include strong, enforceable currency manipulation disciplines (This is vital, due to Japan’s participation in the TPP).

Currency Manipulation by Japan undermines global competition in three ways:

  1. Makes it harder to export American vehicles to Japan;
  2. Provides Japanese automakers with an unfair competitive advantage in the United States; and,
  3. Makes it harder for American companies to compete with Japanese automobiles in other markets, like South America, China, Europe and the Middle East.

AAPC developed a proposal supported by leading non-partisan trade experts that is based on International Monetary Fund commitments already agreed to by all TPP member countries. It asks three simple questions to determine if a TPP member manipulates its currency:

  1. Did the TPP member have a current account surplus over the six-month period in question?
  2. Did it add to its foreign exchange reserves over that same six-month period?
  3. Are its foreign exchange reserves more than sufficient (i.e., greater than three months normal imports)?

If a TPP member is found to have breached its currency commitments under the agreement, the other TPP members shall be entitled to suspend the tariff benefits of the agreement with respect to the violating TPP member.

In an industry where automakers earn about $1,500 on a typical vehicle, Japan’s undervalued currency represents thousands of dollars per vehicle.

Weak Yen Subsidy Per Car in U.S.


Based on the October 1, 2012 rate of 78 yen/$, when Abenomics started.
3-4% profit margin on sedan. Source: McKinsey & Company, 2003 Preface to the Auto Sector Cases

 

Dec 10 2013

AAPC Statement on Trans-Pacific Partnership Discussions in Singapore

Washington, D.C. - American Automotive Policy Council President Matt Blunt today issued the following statement at the conclusion of the latest round of Trans-Pacific Partnership discussions in Singapore:

Dec 04 2013
Written by Adam Behsudi | Posted on Politico Pro

South Korea’s interest in joining the Trans-Pacific Partnership is yet another reason why a final trade pact should include strong, enforceable rules prohibiting currency manipulation, say American automakers.

“The Korean government has intervened frequently in the foreign exchange markets to manage the value of the won to gain or retain a competitive advantage,” American Automotive Policy Council President Matt Blunt says in a statement released today.

The AAPC represents the interests of the “big three” — Ford, Chrysler and General Motors.

Nov 25 2013

Today, U.S. Senator Rob Portman (R-Ohio) visited Chrysler’s Toledo Assembly Complex.  During his visit, Portman had the opportunity to meet with employees as he toured the assembly line and saw first-hand how the new Jeep Cherokee is manufactured.

Nov 21 2013
Written by Melissa Burden | Posted on The Detroit News

General Motors Co. is betting big that it can grow the ailing midsize pickup segment. It will reveal its solution Wednesday at the LA Auto Show: a stylish, sporty and more fuel-efficient 2015 Chevrolet Colorado.

The newly redesigned Colorado will return to showrooms in fall 2014 after going out of production in summer 2012.

“The vision for our midsize truck was really very simple: to produce the most capable, versatile and fuel-efficient midsize pickup truck America has ever seen,” said Alan Batey, senior vice president for global Chevrolet.

Nov 20 2013
Written by Alisa Priddle | Posted on USA Today

Ford will debut a new Edge crossover utility concept Wednesday that is close to the lighter-weight vehicle that will go on sale next year.

The automaker is spending $700 million at the Oakville assembly plant in Ontario to build the 2015 Edge alongside the Lincoln MKX. Ford will export both models.

Design manager Kevin George said the goal was to transform the Edge from a heavyweight boxer to a sprinter — still muscular, but more nimble.