US opens probe of four automakers over California emissions pact

(COMBO) This combination of file pictures created on September 6, 2019 shows the logos of automakers (L-R, top to bottom) BMW, Honda, Ford and Volkswagen. – The US Department of Justice has opened an antitrust probe of California’s agreement with four automakers on fuel efficiency standards that circumvented the Trump administration’s plans, automakers said on September 6, 2019. The agreement, announced in July, increases the fuel economy standards on autos sold in California, conflicting with a White House plan to freeze mileage standards. BMW and Honda confirmed receiving inquiries from the Department of Justice. Volkswagen and Ford did not immediately respond to an AFP query. (Photos by STAN HONDA and SAUL LOEB / AFP)

NEW YORK (AFP) — The US Department of Justice has opened an antitrust probe of California’s agreement with four automakers on fuel efficiency standards that circumvented the Trump administration’s plans, automakers said Friday.

The agreement announced in July increases the fuel economy standards on autos sold in California. These conflicted with a White House plan to freeze mileage standards and ratcheted up a major fight between California and Washington over environmental rules.

BMW and Honda confirmed receiving inquiries from the Department of Justice. Ford did not immediately respond to an AFP query. A Volkswagen spokesman declined comment.

The California policy requires new cars to meet a standard of 50 miles per gallon, (4.7 liters per 100 kilometers), up from the 37 mpg current level, by 2026.

This approach is broadly consistent with a key component of former President Barack’ Obamas climate change strategy. The Trump administration has vowed to reverse the policy.

The DOJ sent letters to the four companies within the past two weeks, according to The Wall Street Journal, which first reported the probe.

The agreement raised concerns within the Justice Department that the agreement with California was negotiated in the fashion of a cartel and could limit competition, the Journal said.

California Governor Gavin Newsom defended the state’s fuel economy policies on Twitter, linking to a New York Times article reporting that the Trump administration was also considering revoking California’s legal authority to set stricter tailpipe standards.

Newsom’s tweet did not mention the DOJ probe.

If Trump wants to “cost the US $400B-Force us to consume 320 billion more gallons of oil-Make consumers pay more at the pump- degrade our air-Risk our health,” Newsom said on Twitter, “All to force a deal carmakers don’t even want? Fine. Then we’ll see him in court.”