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Impact Scenarios of the New Administration on the US Automotive Industry

How will regulatory and trade policies of the new administration affect the automobile market?

Donald Trump's Contract with the American Voter presented a number of issues that the president-elect pledged to address during his first 100 days in office. These included easing regulatory restrictions on energy and re-negotiating or withdrawing from NAFTA. Potential changes for these policies could impact the automotive industry significantly, causing OEMs and suppliers to rethink where they content and manufacturer their vehicles, altering demand for electric vehicles, and up-ending business plans related to energy credits and compliance. The scope of these changes is as yet uncertain, leaving many planners in limbo until a more visible path forward is apparent. IHS Markit can help. IHS Markit has developed three scenarios that may emerge from the new administration's policies:

  • Scenario 1: Assumes the president-elect keeps his word with his "Contract with the American Voter" (VAC)
  • Scenario 2: Assumes the president-elect moderates his view and adopts a more traditional GOP approach to the issues
  • Scenario 3: Assumes Business As Usual (BAU) and anticipates continued political gridlock

Administration Infographic


IHS Markit is uniquely positioned to undertake this study

With experts in economics and country risk, energy, automotive and operational risk and regulatory compliance, IHS Markit has the perspective and insight needed to help you make the best choices and stay ahead of the competition. This high-level study is intended to provide a relatively narrow view of the impact of potential changes in US policy on the automotive industry specifically. Deeper analysis with a wider scenario range capturing broader topics is available on a customized basis from various IHS Markit teams.

The study will include:
  • Preliminary assessment of high-level impact on government spending
  • Evaluation on automotive trade with Mexico if flow is disrupted and/or tariffs applied
  • Examination of the impact of a broad-based economic tariff on bilateral trade with Mexico
  • Impact of evolving CO2/MPG legislation on US vehicle technology
  • Alternative scenarios for economics, trade and regulations
  • Executive-level summary report containing charts and data and a workship with key project contributors

Alternative Scenarios

The alternative scenarios presented in the study will cover:


The Economics and Country Risk team at IHS Markit will evaluate US macroeconomic impacts of potential policy changes, including how widespread, inflation potential, ripple effects throughout the supply chain, transportation network disruptions, employment, and consumer discretionary income.

  • Real GDP
  • Real interest rates
  • Federal budget balance
  • Real trade
  • Economic impact analysis of trade flow

The Economics and Country Risk team at IHS Markit will examine the impact of a broad-based tariff on bilateral trade with Mexico. The team will assess and transform the IHS Markit trade flow data to conform to the requirements of the US Macro Model and run the New Administration Scenario.

  • Import/export flows
  • Parts
  • Impact on vehicle OEMs
  • Value of flows
  • Impact on jobs

The IHS Markit powertrain team will examine the impact on evolving CO2/MPG legislation on US vehicle technology. The scenarios will take a look at fleet evolution if the current regulatory environment changes.

  • Sales volumes
  • Segment shifts
  • Technology: Electric and hybrid vehicles
  • Downsize boosting trend for internal combustion engines
  • Fuel type
  • Lightweighting activities
  • MPG performance, EPA credit values, business model for subsidized start-ups

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