Here's The Sweet Spot In China's Carrot-And-Stick Trade Negotiations

Illustration for article titled Here's The Sweet Spot In China's Carrot-And-Stick Trade Negotiations
Photo: Getty Images

Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.


1st Gear: What Does Trump Concede?

The Trump Trade War doesn’t have to be bloody. In fact, it doesn’t really need to exist at all. But we know what the opening salvo looked like – in return for Trump’s favor to the steel and aluminum industries, China would take out its trade hammer and smash significant dents into the automotive and agricultural industries. But again, it doesn’t need to be that way, and President of China and dictator for life Xi Jinping knows that, so he offered an alternative to the trade hammer, the Associated Press reports:

Xi, the country’s most dominant leader since at least the 1980s, said Beijing will “significantly lower” tariffs on auto imports this year and ease restrictions on foreign ownership in the auto industry “as soon as possible.”

He also promised to encourage “normal technological exchange” and to “protect the lawful ownership rights of foreign enterprises.”

A sticking point in China for all global trade partners is not only its long-standing 25 percent tariff on imported cars (which didn’t seem to hurt American manufacturing too bad, as hundreds of thousands of cars built in America are still imported to China), and an odd bit of law where every factory built needs to be an at least 50 percent joint venture with a Chinese company. So if GM wants to build a factory in China, it can only own 50 percent of that factory.

While lowering that 25 percent tariff and doing away with the 50 percent rule both sound nice, I’m a bit wary. Opening up trade rules and narrowing the trade surplus has been a stated goal of the Chinese government for years now, with no changes whatsoever. So we’ll see.

And then, what does Trump offer as a concession in return? Lowering his big, beautiful, huge steel and aluminum tariff? And risk going back on his big blustery threats?

President Deals really doesn’t have a lot of options here.

2nd Gear: Elon Musk And The NTSB Try To Patch Things Up

The National Transportation Safety Board was pissed off last week after Tesla started releasing preliminary information concerning a fatal Autopilot crash, just as the NTSB investigation was getting going. Standard procedure in this sort of case is generally to hold onto all the information until everyone’s got all the information, and then release it and analyze it once the facts are all laid bare.


So Tesla CEO Elon Musk and NTSB chairman Robert Sumwalt got on the phone to hash it out, Bloomberg reports:

Musk and Robert Sumwalt, chairman of the National Transportation Safety Board, talked by phone over the weekend, agency spokesman Peter Knudson said. The two discussed the March 23 fatal crash in California involving a Tesla Model X that’s under investigation, plus recommendations the agency made after its probe of a 2016 deadly crash involving a Tesla Model S, Knudson said. Both drivers had engaged Tesla’s driver-assistance system Autopilot.


Hey Elon, we’ve got plenty of questions, too. Call us. You’ve got our number.

3rd Gear: There’s Finally Someone In Charge Of NHTSA

President Trump loves to complain that his appointments are being held up by the Congress, but the truth of the matter is that he hasn’t really made many. Everyone is waiting on him, 15 months into his presidency, and that includes NHTSA. But now, we’ve finally got one.


Drum roll please.............. IT’S THE SAME ONE WE HAD BEFORE!! WOOO!!! The Detroit News reports:

Fifteen months after taking office, President Donald Trump has nominated a person to lead the National Highway Traffic Safety Administration.

Heidi King is the nominee for administrator of the nation’s highway safety agency, a position that’s been vacant since the president took office. King, who currently is deputy NHTSA administrator, has been the agency’s interim chief since September 2017.

The Trump administration has been criticized by safety and consumer advocates for leaving the position vacant. Trump has yet to make numerous appointments in the government, but the year-plus vacancy at NHTSA was particularly galling to safety groups in Washington.


Will she be fixing the five-star government clusterfuck? Who knows, probably not.

4th Gear: Volkswagen Might Be Getting A New CEO

Matthias Müller has been in charge at Volkswagen since September 2015, and that whole time a large portion of his job has been to deal with the fallout from Dieselgate. The VW board has apparently decided that it’s time to move on from that whole mess, and Reuters says that it’s looking at a new CEO:

HAMBURG/BERLIN (Reuters) - Volkswagen’s (VOWG_p.DE) supervisory board is set to name VW brand chief Herbert Diess as the group’s new chief executive, replacing Matthias Mueller, two people familiar with the matter said.


Vaya con dios, VW.

5th Gear: Parts Company Buys Parts Company

Tenneco, an auto parts company, is buying Federal-Mogul, an auto parts company, CNBC says. You probably won’t notice a difference in your daily life.


Reverse: Mike Hawthorn!

Mike Hawthorn, the first-ever British Formula One champion, was born on this day in 1929. He died in 1959 in a car accident.


Neutral: What Chinese Car Will You Buy In 25 Years?

And why is it a Hongda?

Deputy Editor, Jalopnik. 2002 Lexus IS300 Sportcross.



First: It seems like Trump may have gotten us a better deal. Why bash him for this item?