Aug. 23, 2025 | Weekend Drive: EU trade framework; pessimism grows across industry

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Welcome to this weekend drive edition of Daily Drive for the fourth week in August 2025.

I'm Kellan Walker in Las Vegas. We're breaking down some of the biggest stories in the auto

industry from the past week and looking forward to what's in store in the days ahead.

Joining me on the show today, Hannah Lutz is director of tech and innovation coverage for us

at Automotive News. Hannah, welcome back to weekend drive. Hi, Kellan. Thanks for having me.

And Michael Martinez, who covers Ford and the UAW. Mike, welcome back. Happy to be here.

All right. So guys, welcome both to the show. Let's get started. So the U.S. and

EU trade deal, what do we know so far and what is the industry saying?

So there are a few knowns and a lot of unknowns. First of all, it's not a deal yet. It's still

a framework. This latest development is more details on that framework for a deal.

For the first time, there's been a document in writing, not just all verbal. And although

verbal agreements have been made, we knew about that 15% tariff floating around before.

The EU is still subject to 27.5% tariffs on vehicles and in auto parts, so that 15%

hasn't taken effect yet. So it just adds a little bit more clarity to this waiting game.

Another aspect of this is part of the update said that the U.S. and the EU intend to accept

and provide mutual recognition to each other's standards for vehicles. It was one sentence

that could be a game changer, but we really don't know. Our colleague, Richard Truett,

is covering that development, so follow autonews.com for more on that. So far,

European leaders are concerned that U.S. made vehicles on European roads will compromise

safety where they live. This is for either one of you. How does this benefit European automakers?

Well, it will benefit them eventually once this is signed, because as Hannah mentioned,

they're subject to that 27% tariff right now, probably going down to 15%. So if you're a BMW

or if you're a Mercedes, you want to see that number lowered. That's hammering profits right now

for every vehicle they send to the U.S. I think what Hannah mentioned in terms of the standards,

sort of harmonizing those standards, like she said, could be a game changer. That's huge.

The amount of money any company wastes having to re-engineer a vehicle, whether it's safety

standards, headlight sizes, brightness, whatever that may be, is pretty significant. And the

other aspect to all this is sort of the initial stage talks of potential changes for parts,

steel and aluminum tariffs that automakers are getting hammered by right now at 50%.

If there's any movement there, that would be positive.

Yeah. And we heard from Autos Drive America that the European Union will try to introduce

the legislation on the 15% tariff rate in the next month, and it would be retroactive. So really,

the sooner, the better. If they introduced it tomorrow, for example, it would be retroactive

to the beginning of August, which would be a plus for the industry.

Real quick. I spoke with Larry Velquette about this time last week, about this,

and we keep seeing this number of 15. Do we think that's going to be, I mean,

looking down the road, maybe even looking into the crystal ball, that it's 15%,

you think, going to be the number for all of these other countries also that are waiting for

deals? So like Japan, South Korea, China, do we think 15% is the magic number?

It could be especially for Japan and South Korea. We're seeing very similar frameworks

across the board. China, though, is an outlier, and China got a 90-day extension for

the tariff deadline. So yeah, China's very much up in the air, and I would think they would have a

much higher tariff than the other countries, but we're still waiting to see on that.

Kel, the only thing I would say there is that 15 is certainly higher than it has been in many

places. So it's not like the automakers are going to be cheering for that as the magic

number. But everything we've talked about time and time again is that these companies just

want certainty. And if they know for sure that 15 is the number, that it's going to be

coming soon or will already be in place, they can at least start to plan and change their

cycle plans and change everything about the business to match that. And that's an important point.

Yeah, it's all about planning, financial planning, product planning. They need

to have the numbers in place to do all of that. So any clarity will be helpful to them.

Love it. Great, guys. Well, coming up, we'll talk about some of the other big stories

of the week in the auto industry, including our inaugural Automotive News Auto Industry Confidence

Index, which found that automakers, retailers and suppliers are feeling more pessimistic about

the future of the industry. That's next on Weekend Drive.

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Welcome back to Weekend Drive. I'm Kellan Walker with Mike Martinez and Hannah Lutz.

So guys, automakers and franchise dealerships and suppliers are all reporting

falling confidence with the overall industry in our inaugural automotive news

auto industry confidence index. Is tariffs and policy driving this falling confidence?

Yeah, they're definitely major factors. I mean, tariffs, we just talked about the uncertainty

of the tariff cost and for suppliers, how it'll be passed down to them. And for policy, I mean,

the industry was heading in one direction under Joe Biden and now it's completely

pivoted under President Trump. So it's really a big change in strategy that for some

has been flip-flopping or is not completely clear in the future.

Yeah, I think tariffs, the T word is affecting every single aspect of the industry and every

single respondent to the survey is feeling it somehow. If that's not their main concern, then

some of their other concerns are essentially offshoots of the tariff impact, right?

If you talk about low demand, low inventory and dealer lots, that's because everybody was

rushing to buy a car a few months ago and now that demand isn't quite there because of the fear that

prices would go up because of tariffs. So it's definitely the elephant in the room.

Right, there's such a trickle down effect. There were some other costs that were part

of the survey that people were worried about and there's a clear line to tariffs.

Also, Nissan is just one brand that is reshaping its product lineup. Is the new political environment

and the shift away from electrification leading automakers to focus again on more traditional

products to round out their offerings? I think that's the case we're seeing with Nissan. They

needed to do something regardless of the tariff situation, regardless of President Trump's policies.

They've been struggling in the US and they're playing the hits to try to get back on track.

We saw the dealer meeting in Vegas. They announced they're going to have a new XTERRA,

which by the way, Automotive News subscribers knew about this back in April.

I'm going to airvash, constantly breaking news there, but it's a popular product in a popular

segment. It was a popular product, I should say. And if you're an automaker in 2025,

you should have a good entry in that sort of off-road crossover utility space.

It's going to sell well and you can put add-ons onto that. People will be happy to pay for. Just

look at Bronco or Wrangler customers. That can help pad dealer profits. That's exactly what Nissan

needs right now. Yeah, it is interesting because we went from an industry where the

automakers were really trying to chase regulation, trying to hit their targets with a new EV,

new EV, new EV. And now that some of those or almost all of those really have gone away or

are going away, it's really what does the consumer want to buy? So like Mike said, if they're going

back to their hits, they're hoping to have success there. Yeah, I spoke with Nissan chairman of

North America Christian Mounier here in Vegas and that's kind of echoing what he was saying.

He said that there's three pillars for Nissan. It's getting focused again on selling cars,

dealer profitability, and of course taking care of the customers. So something like the Xterra

coming back, which he said it was a game changer for Nissan. Very excited about the return.

And I also asked him about the Nissan Rogue and how critical the success of the Rogue is for the

company. And he flat-out said, you know, it's their bread and butter and they're going to be

getting a redesign of that in 2027. So it looks like there's a lot of good things on the way

with Nissan, including Infinity also. So I guess we just kind of got to sit back and just see what sticks.

And Kel to your point on alternative powertrains, both the Xterra and the next-gen Rogue,

going to have hybrid options, right? And Hannah, like you said, this is what people want. They

don't want to take that full leap into EVs with still all the concerns about charging and battery

costs and things of that nature. Hybrid could be a great alternative. Yes. And for our listeners,

make sure you come back on Monday for my conversation with Nissan America's chairperson

Christian Munier. You don't want to miss out on that. And before we go, next week is Automotive

News' 100th birthday and we've got some exciting plans in store for our audience. Hannah,

tell us about how our listeners can help us celebrate. Yeah, we're very excited for this.

So on Wednesday, the 27th at noon Eastern time, we will be live streaming a conversation,

sort of a party with with a lot of our staff members to celebrate our Centennial, the Automotive

News' 100th birthday. Kel, you'll be co-hosting with me and Mike will make an appearance. We'll

talk about, you know, the biggest trends and stories over the years from automakers, suppliers,

dealers, and then we'll also look ahead to the next 100 years, what we can expect in the

technology and industry changes we're excited about. Mike, can you fill us in? Tell us

what you're thinking about. Don't give too much away, but tell us what you're thinking about going

through from the automaker point of view. Yeah, no, we're going to have a lot of fun. Our friend

Cali Aguilera Velikwet is going to be joining me as well. We're going to talk about, we're coming

up right now with sort of some of the biggest moments for automakers, some of the biggest

vehicle reveals over, you know, however many years. I'm going to talk a little UAW,

a little labor as well, because we're going to come out with a story about the impact

the union has had on the auto industry over the past century and not to give too much away,

but I think we have a little Keith Crane audio Easter egg for people too, which could be fun.

Yeah, I'm excited. I get the co-host with you, Hannah. I swear to God, I will not let it go

off the rails. And we should know, but it should be fun. It should be a great time. This

is really big for automotive news. 100 years Centennial, it only happens once. So listeners

should not miss out on this at all. It's going to be a really good time. All right, great. Well,

that is all for this weekend drive edition of Daily Drive. I'm Kellen Walker. Thanks to

Automotive News executive producer Jake Nier for his help on today's podcast. You can get the

latest news on trade and tariffs, auto maker product plans and everything happening in the

auto industry at AutoNews.com. Come back on Monday for my interview with Nissan America's

chairperson Christian Mounier. I think the product is very, very good. We have some

deficiencies like we're lacking hybrid, for example, on the C segment. And we know that's

important to have it. But the availability of the new road with hybrid next year is going to be a

game changer. We'd love to hear from you. Let us know what you think of the show and the topics

we cover today. Send us an email at dailydriveatautonews.com or leave us a voicemail at 313-444-2774.

If you enjoy the podcast, remember to like, leave a review and subscribe so you never miss an episode.

Aug. 23, 2025 | Weekend Drive: EU trade framework; pessimism grows across industry

Nissan XTerra

Ford Bronco

Jeep Wrangler

Nissan Rogue

Buick Century

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