WASHINGTON — President Donald Trump told leaders of the country’s largest automakers Tuesday that he would curtail environmental regulations and make it easier to build plants in the U.S., changes that he expects will shore up the manufacturing jobs he repeatedly promised to voters on the campaign trail.
But even the positive overtures Trump offered during the White House meeting — which came after weeks of taunting the automotive industry over Twitter — may not compensate for the fact that automakers can produce vehicles more cheaply in Mexico and will likely see softening demand for cars in the coming years, analysts say.
Just the day before, Trump told business leaders he would cut regulations by 75 percent and “massively” cut corporate taxes. When meeting the CEOs of General Motors, Ford and Fiat Chrysler, he specifically targeted environmental regulations, which he called “out of control.”
Though Trump spoke often on the campaign trail about the need to revive manufacturing across the economy, he narrowed in on the automotive industry in particular in the weeks following his election. He separately criticized Ford, GM and Toyota for plans to build certain cars in Mexico and then sell them in the U.S.
Though regulatory changes could make it more appealing to manufacture in the U.S., companies will still find there are significant economic and trade advantages to building in Mexico, including cheaper labor and fewer export restrictions, said Michael Harley, an executive analyst at Kelley Blue Book.
“No matter how many incentives you offer automakers or [whether you] give them tax breaks, you still have the labor issue to deal with,” he said. “And you’re never going to be able to meet that on a one-to-one basis.”
The big automakers also make investments knowing they will outlive any single president, regardless of what policies or regulations are put in place, said Kristin Dziczek, director of the industry, labor and economics group at the Center for Automotive Research.
“This industry has been around for 100 years, and plants last for 40 or 50 years or more,” Dziczek said. “They can’t be swerving left and right every time there is a political change.”
Trump called himself an environmentalist when he sat down with the CEOs of General Motors, Ford and Fiat Chrysler, and said his administration will focus on “real regulations that mean something” while eliminating those that he finds inhospitable to business.
Executives declined to answer questions after the meeting, including whether the president cited any specific regulations he would cut. Only a portion of Tuesday’s gathering was open to the press.
Industry leaders contend that complying with increasingly stringent fuel economy standards increases the cost of making cars, which must then be passed on to buyers or compensated for with job cuts. Those regulations were introduced during Obama’s first term to reduce pollution and encourage investment in eco-conscious technology. The Environmental Protection Agency upheld them in a review concluded two weeks ago.
Safe Climate Campaign Director Daniel Becker said job creation doesn’t need to come at the expense of regulations that have a positive impact on the environment. The fuel economy standards, in particular, help to save consumers money at the gas pump and reduce the country’s dependence on oil, he said.
“Despite the rhetoric there is often reason behind regulations, and in this case there is overwhelming evidence of how beneficial they are for consumers, the industry and overall Americans,” Becker said.
Analysts have speculated that Trump could ease those regulations or others that impact the industry as a reward for companies creating more jobs in the U.S.
“There is a huge opportunity working together as an industry with government that we can improve the environment, improve safety, and improve jobs creation and the competitiveness of manufacturing,” General Motors CEO Mary Barra told reporters after the meeting.
Ford chief executive Mark Fields told reporters that Trump’s decision Monday to withdraw from the Trans-Pacific Partnership was a sign of his desire to implement policies that improve competitiveness and “create a renaissance in American manufacturing.”
“We have been very vocal both as an industry and as a company and we have repeatedly said that the mother of all trade barriers is currency manipulation,” Fields said. “TPP failed in meaningfully dealing with that and we appreciate the president’s courage to walk away from a bad trade deal.”
Fiat Chrysler CEO Sergio Marchionne also attended Tuesday’s meeting.
Vice President Mike Pence, Chief Strategist Steve Bannon, Chief of Staff Reince Priebus and Senior Advisor Jared Kushner attended on behalf of the administration.
Economics still favor building plants and hiring workers in Mexico, where labor is less expensive and there are fewer trade barriers.
Trump has threatened automotive companies that build abroad with a 35 percent tariff on goods imported to the U.S. for sale. Whether Trump has the power to impose such a tax on select companies has been called into question.
Conversely, Trump has also praised automakers who pledged to invest in the U.S. and add jobs here — often taking credit for those decisions even when companies said they had been in the works for months or years. This month alone, Ford, Fiat Chrysler, GM, Toyota and Hyundai pledged to spend billions of dollars in the U.S. over the next several years on new factories, expanded production and hiring.
Trump met Monday with business leaders from a smattering of industries, including Fields and Tesla CEO Elon Musk.
The CEOs were told to devise a “series of actions” that will boost U.S. manufacturing and submit those plans to Trump within the next 30 days.
In a meeting with automakers Jan. 24, President Trump said that “it’s the long term jobs that we’re looking for.”