Between NorCal and SoCal... lies the Governor of California. Four car companies secretly met up with him to negotiate a compromise on minimum MPG fuel efficiency. You borderline needed to whip out a pocket Constitution to understand this one.
Cars cause pollution... Econ 101 says that governments tax pollution or put limits on it. President Obama ordered that car companies increase their minimum average fuel economy to 54.5 mpg by 2025. President Trump doesn't believe that's necessary and prefers 37 mpg. That's why California planned to exercise its waiver from federal fuel economy laws to keep stricter standards, and 13 states want to follow its lead.
- The nightmare scenario: Car companies might have had to create two lineups of cars — one for the 36 states following Trump's rules, one for the 14 more dedicated to fighting climate change.
- Instead they compromised: Ford, Honda, VW, and BMW made a pact with California to follow a (very efficient) 51 mpg nationwide by 2026. More automakers are expected to follow.
This is why car companies want trade deals... Drastically different fuel standards between "teams" of states would've given carmakers tons to comply with — sometimes 2 assembly lines are needed instead of 1. Trade deals can fix that. Take the proposed Trans-Pacific Partnership (a US/Asia trade deal that fell apart). It would've unified standards between the US and Japan, but politics killed it. Car companies are intervening to unify the US.