WASHINGTON — At the halfway mark of President Donald Trump's term, the auto industry is still coming to terms with the costs of two years of roller-coaster trade policy.
And more turmoil is expected in 2019 as Trump tries to make good on campaign promises to reduce bilateral trade deficits and stimulate domestic manufacturing by restricting or punishing imports.
Many automakers and suppliers were once dismissive of Trump's campaign threats to unwind NAFTA and impose more tariffs, reasoning that business-friendly advisers and industry executives would prevail upon him to moderate his stands.
Instead, the sector faced a tumultuous trade environment starting with the administration's first week, when Trump withdrew the U.S. from the 12-nation Trans-Pacific Partnership, which was seen as a way to check China's power.
Since then, his team forced Mexico and Canada into a NAFTA rewrite, renegotiated a 2012 free-trade deal with Korea, engaged in a tit-for-tat tariff war with China, imposed tariffs on imported steel and aluminum that triggered retaliation from trading partners and threatened new tariffs on foreign autos and auto parts on national-security grounds. And it's about to launch trade talks with the European Union and Japan overshadowed by the specter of punitive action on autos.
"Prior to Nov. 8, 2016, it felt like an opportunity to expand, and for [us] to have more access to foreign markets for U.S.-built vehicles," said a representative for a Japanese automaker who is not authorized to speak publicly. "But unfortunately, since that time things have changed dramatically."