President Trump initiated NAFTA renegotiations talks earlier this year, but thus far, little progress has emerged from discussions. However, the Trump administration’s most recent proposal has actually become a concern for U.S. auto manufacturers.
The Detroit News reports the Trump administration has proposed a requirement that 85 percent of a product’s parts must come from the U.S., Canada or Mexico, which marks a substantial increase from the 62.5 percent figure today. Additionally, 50 percent of the parts must come from the U.S.
On paper, it seems like a fair adjustment to increase U.S. manufacturing and jobs. However, Alliance of Automobile Manufacturers VP of Federal Affairs, Jennifer Thomas, says the proposed requirement would likely eliminate production and jobs, and not add new work.
“We strongly believe this is going to have an adverse effect,” she said. “It’s going to lead to a decrease in production, a decline in jobs and an increase in cost to consumers. A lot of companies are going to forgo the NAFTA benefit and just pay the tariff, so you’ll see a shift in production to other locations.”
In other words: companies will likely skip the requirement and pay the tariff in order to outsource production to less expensive countries. She added the new rules would hurt the U.S. manufacturing base and curb American industries’ ability to export products.
Comments
Here’s a thought. Increase the tariff so that’s not an option for them. Either way, we, the consumer, is going to pay. We can pay more for our vehicles to support the higher wages of American auto workers or we can pay to cover the tariffs and support foreign auto workers. I know which group I’d rather support.
I think you’re forgetting there are two other countries in the mix here…
50% parts from US is also nonsense.
The two other countries would fall under “foreign auto workers”.
50% US manufactured parts content is nonsense in what way? Too much or too little? Please explain.
@ GM Authority
4 U.S.C. Subsection 7C States: no other flag or pendant should be placed above or, if on the same level, to the right of the flag of the United States of America, except during church services conducted by naval chaplains at sea, When the church pendant may be flown above the flag during church services for the personnel of the Navy. No person shall display the flag of the united nations or any other national or international flag equal, above, or in a position of superior prominence or honor to or in place of the flag of the United States or any territory or possession thereof. I understand that this is an error. And not an attempt to disrespect the American flag. I look forward to an updated photo with the American flag in front. Thank you in advance.
US flag protocol doesn’t apply to photoshoped images. Grow the hell up.
Business is business what’s best for business in the United States will ultimately be best for the United States and its workers and citizens.
less Bureaucracy. the more value would be injected in the product.. in a perfect world..