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‘Cruel Parody of Anti-Trust Enforcement’ as Trump Justice Department Probes Automakers’ Emissions Deal with California

In what a New York Times editorial calls a “cruel parody of anti-trust enforcement”, the U.S. Justice Department has launched an investigation after four major automakers embarrassed Donald Trump by striking a deal with California to boost their vehicles’ fuel efficiency and reduce their tailpipe emissions.

After Ford, Volkswagen, Honda, and BMW announced the deal in July, Trump denounced it as a “P.R. stunt”. Then in a tweet in late August, he “criticized the ‘politically correct Automobile Companies’, arguing his proposal would lower car costs and have ‘very little impact on the environment’,” The Guardian reported at the time.

“Now, the Justice Department is investigating whether the four automakers violated federal antitrust laws by reaching a deal with California, on the grounds that the agreement could potentially limit consumer choice,” the Times says, citing “people familiar with the matter” who spoke to the Wall Street Journal. “The investigation comes amid a battle over the Trump administration’s effort to drastically roll back Obama-era rules intended to reduce emissions from cars and light trucks that contribute to global warming, a rollback that major automakers have publicly opposed.”

The White House is also considering measures to rescind California’s hard-won right to set its own, stricter fuel efficiency standard. California and 18 other states have vowed to protect that authority in court.

“In a clear signal that the administration intends to increase the pressure on California, top lawyers from the Environmental Protection Agency and the Transportation Department on Friday sent a letter of rebuke to Mary D. Nichols, the state’s senior clean air official,” the Times states. “The purpose of this letter is to put California on notice” that the deal with the four automakers “appears to be inconsistent with federal law,” the letter read, since authority to set fuel economy standards and influence regulations across the U.S. is “squarely vested” with Congress.

“The Trump administration has been attempting and failing to bully car companies for months now,” replied California Governor Gavin Newsom. “California stands up to bullies and will keep fighting for stronger clean car protections that protect the health and safety of our children and families.”

Anti-trust experts consulted by the Times said Trump’s justice department would likely argue that, by agreeing to a standard that exceeds the federal minimum, automakers could be imposing a more expensive range of vehicle models on buyers across the U.S.

“That anti-competitive theory relies on the idea that it is improper to agree to do more than what is required by the federal government,” said Louisiana State University environmental law specialist Nicholas Bryner. But “given that California has the legal authority to create emissions rules that are stricter than federal rules, this case doesn’t make any sense,” he added. “From an environmental perspective, this move seems designed to intimidate California and the automakers that signed onto the deal.”

New York University environmental law specialist Richard Revesz agreed the investigation amounts to a show of force aimed at companies that have displeased the current occupant of the White House. “These are four car companies standing in the way of something the president wants to do,” he told the Times. “Now the enormous prosecutorial power of the federal government is brought to bear against them. This should make any large companies very nervous.”

Even Myron Ebell, who led the Trump transition team for the U.S. Environmental Protection Agency and new runs the energy program at the industry-funded Competitive Enterprise Institute, acknowledged that anti-trust laws are often used as a “shot across the bow to get the attention of corporations”. He added that “the anti-trust statutes give the government quite a lot of power to threaten companies with anti-collusion charges.”

And sure enough, after the German government heard about the investigation, the Times says it warned Mercedes-Benz not to join the deal.

In a scathing editorial, the Times declares that the investigation “is an act of bullying, plain and simple: a nakedly political abuse of authority,” aimed at “four auto companies that had the temerity to defy the president by voluntarily agreeing to reduce auto emissions below the level required by current federal law.”

The U.S. Department of Justice “is supposed to prevent companies from acting in their own interest at the expense of the public. The four automakers, by contrast, are acting in the public interest,” the Times notes. “That the government of the United States would fight to loosen emissions standards in the face of the growing threat posed by climate change also boggles the mind. Not content to fiddle while the planet burns, Mr. Trump is fanning the flames.”