Will Trump’s deregulation of the U.S. auto industry herald a 'second spring' for gasoline-powered vehicles?

What we’re doing today is truly enabling Americans to afford new cars, drive high-quality vehicles, and travel more safely on our roads. Old cars remain expensive, preventing consumers from upgrading to newer models equipped with modern safety technologies—contributing directly to higher traffic fatality rates. Now, consumers can buy whatever vehicles they want, and automakers can build exactly those vehicles—that’s freedom, that’s job creation, that’s common sense. Ford CEO Jim Farley put it perfectly: "Today is a victory for common sense and affordability." Ford is America’s largest automaker; 85% of the vehicles it sells in the U.S. are built domestically. We’ve never left—and we remain the nation’s top vehicle exporter, employing more American factory workers than any other automaker. The new standards empower the market. This allows us to redirect more resources toward affordable, consumer-desired, American-made vehicles. I’d also like to announce some good news: I have instructed the Secretary of Transportation to immediately lift restrictions on small cars. Go look at Japan and South Korea—their compact, charming, highly efficient small cars are actually beloved by American consumers. But outdated regulations previously barred their production here. Now the path is clear—Toyota and all other automakers, get moving! This will enable more ordinary Americans to drive brand-new, affordable, and practical vehicles. Stellantis CEO Carlos Tavares stated: "Confident in America’s new policy direction, Stellantis will invest $13 billion in the U.S. over the next four years—boosting production capacity by 50%, launching five new models, and creating 5,000 new jobs." Urbank, from GM’s Orion Assembly Plant, added: "We’re expanding our production lines to build more pickup trucks and SUVs." Chris Kettering, President of the National Automobile Dealers Association, said: "Consumers can finally ‘buy the car they want’—and with the reinstatement of auto loan interest deductions in the tax code, families can save hundreds or even thousands of dollars in taxes. That’s tremendous news for both consumers and dealers." I especially want to highlight the auto loan interest deduction. Previously, only the wealthy could claim various interest deductions—middle-class families buying cars with loans received zero tax relief. Now, regardless of income level, the full interest paid on auto loans is deductible from federal income tax. For many households, this slashes the true cost of car ownership by half—and may be the single most impactful automotive provision in the entire ‘Great and Beautiful Act.’ Finally, let me emphasize: Today is just the beginning. We’re using tariffs to bring manufacturing back home and make America the ‘hottest country’ once again. A year ago, this nation felt lifeless—but everything changed after November 5th. We’ve ended eight wars—five of them through decisive tariff policies and tough trade negotiations. We’re now entering a commercial revolution, an employment revolution, and a renaissance of the American auto industry. The U.S. auto industry was stolen from us—and now we’re taking it back, stronger than ever before. Thank you—and God bless America! (End) CAFE (Corporate Average Fuel Economy) standards are federal regulations enforced on automakers by the U.S. government. Administered jointly by NHTSA (National Highway Traffic Safety Administration) and EPA (Environmental Protection Agency), CAFE mandates that each manufacturer’s overall fleet of new vehicles sold in the U.S. must meet government-set average fuel economy and emissions targets—or face steep financial penalties. For example, CAFE’s implicit penalty mechanism against large-displacement engines (e.g., V8s) indirectly constrains production of SUVs and pickup trucks.

Bloomberg Opinion: Did Trump personally hand the automotive industry’s future over to China?

Poorly conceived trade restrictions have an ugly habit of boomeranging back to harm their initiators. Trump’s March 2018 tariffs on steel and aluminum were costing the U.S. $4.6 billion per month in higher costs and lost tax revenue by the end of the year they were introduced. Former President Barack Obama’s 2012 duties on Chinese solar panel manufacturers triggered retaliatory measures that wiped out U.S. production of polysilicon—a critical raw material for solar panels—in which American companies had once held global dominance. We’re about to witness that same scenario unfold again. To Trump, dismantling the remnants of one of Biden’s signature clean-energy policies isn’t an unintended side effect—it’s the very point of these tariffs. Among his first executive actions were moves to scrap rules compelling automakers to electrify their fleets, cut funding for EV charging infrastructure, rescind corporate average fuel economy (CAFE) standards, and roll back environmental regulations governing tailpipe emissions.

Trump Administration to Roll Back Biden-Era Auto Fuel Economy Standards

1 day ago

The Trump administration plans to ease Biden-era fuel efficiency mandates, lowering 2031 vehicle requirements to 34.5 mpg from 50 mpg. This move aims to boost domestic auto production amidst record-high gasoline and diesel prices driven by geopolitical conflicts.

bloomberg

2026-09-26

Trump Administration to Roll Back Biden-Era Auto Fuel Economy Standards

Trump Administration to Roll Back Biden-Era Auto Fuel Economy Standards

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