White House ends mileage talks with California; lawsuit looming

WASHINGTON -- The Trump administration on Thursday broke off talks on vehicle mileage standards with California, increasing the chances of a court battle that threatens to unsettle the auto industry.

The White House, which has proposed freezing the standards, said it would now move unilaterally to finish its own mileage rule later this year "with the goal of promoting safer, cleaner, and more affordable vehicles."

The administration's action challenges California's decades-old authority to set its own, tougher mileage standards. California has used a waiver that Congress granted it under the 1970s Clean Air Act to help deal with its punishing smog. About a dozen states follow California's mileage standards; that group accounts for about one-third of U.S. auto sales.

Lawmakers and automakers had urged a settlement and warned different standards could bring years of court battles and raise costs for automakers and consumers.

"The industry requires certainty about future regulatory obligations," Honda said in a statement. State and federal government rules should aim for "continuous progress" on cutting fossil-fuel emissions and promoting electric vehicles, the automaker added.

It urged the two sides to find middle ground.

California officials and the administration accuse each other of failing to present any acceptable compromise. The dispute comes as President Donald Trump feuds with the Democrat-led state over his proposed U.S.-Mexico border wall and his threats to take back federal money from a high-speed rail project. California has taken a leading role in a 16-state lawsuit against Trump's declaration of a national emergency to get money for the wall after Congress refused to provide it.

"Another targeted attack on CA by the Trump administration," tweeted Gov. Gavin Newsom, D-Calif. "Clean air should be the most basic of human rights. This is a reckless political stunt that puts the health of MILLIONS of kids, families, and communities across America at risk."

The administration last year proposed freezing mileage standards for cars and light trucks after slightly tougher 2020 levels go into effect. Doing so would scrap an Obama-era rule that would have improved fuel efficiency in 2025 to a fleet average of 36 mpg on the road. The Obama standard would have raised fuel efficiency by 10 mpg over current levels.

Trump's move is one of a series of rollbacks targeting Obama administration efforts against pollution and climate change.

Janet McCabe, an acting assistant administrator for air at the Environmental Protection Agency under President Barack Obama, said California's years of technological and regulatory efforts to lower pollution have pushed the auto industry to make cleaner-burning vehicles.

The conservative American Energy Alliance asserted that the state's politicians long have taken a stand against "affordable, abundant energy, no matter the impact on California families."

The auto industry hasn't given up hope for an agreement on one national standard.

A major industry organization said automakers still support gradual increases in fuel economy that account for the shift from cars to SUVs and trucks.

"We encourage everyone to keep focusing on how we get there, because this is in the best interests of all parties, including consumers," the Alliance of Automobile Manufacturers said in a statement.

Because it takes several years to design vehicles, automakers have been planning to meet higher mileage requirements under Obama-era standards, as well as those in other countries.

For the 2020 model year and beyond, automakers already are designing many cars, trucks and SUVs that can be powered by conventional gasoline engines as well as more efficient gas-electric hybrid systems, auto industry analyst Sam Abuelsamid of Navigant Research said.

For now, "essentially the industry is ignoring what Trump wants to do," Abuelsamid said. "We know at least until this thing gets settled in the courts, we have to deal with California and the other states and have product that can sell there as well as products that can sell overseas."