Automobiles remain a sticking point as the United States and Mexico continue negotiating a new bilateral trade agreement to replace the two countries’ existing trilateral NAFTA deal with Canada, auto industry officials have told Automotive News. Signs indicate that the two countries are close to reaching a deal, after which Canada would be allowed to rejoin trade agreement talks, but the Trump administration has held firmly to a number of harsh demands that have caused negotiations to drag on longer than expected.
Reportedly, one of those demands is the ability to impose stricter tariffs on automobiles and parts from new plants in Mexico should those imports be declared a national security threat – the same justification used by the Trump administration to place new import duties on steel and aluminum imports. Old plants would essentially be exempt from the tariffs, but the looming threat of a possible future 25-percent import duty could deter investment in the country, AN‘s sources say.
“Deal with Mexico is coming along nicely,” Trump tweeted on Friday. “Autoworkers and farmers must be taken care of or there will be no deal. New President of Mexico has been an absolute gentleman.”
Another key sticking point has been strict demands regarding parts-source requirements. AN reports that US trade negotiators have barely budged from their demands from last May that 75 percent of an automobile’s parts content must come from North America, with 40-45 percent from so-called “high-wage zones” – basically, the US and Canada.
Despite the Trump administration’s optimism regarding the bilateral trade negotiations, Mexican Economy Minister Ildefonso Guajardo told reporters Friday that “nothing is close until everything is close, but there are items in every element that is being discussed.” He said talks would resume this week, but that many issues had to be worked out before a deal could be made and Canada could rejoin the discussion.
Comments
Both GM and Ford have important assembly plants in Mexico. The assembly cost per vehicle is a percentage of its total cost but when sold in Mexico, the U.S., or elsewhere, all the profits per vehicle return to the U.S. Same with Canada, where my two past GM vehicles were assembled.
Yeah, Mexico did just become a cheap labor export platform, a maquiladora.
NAFTA has been a bad deal for Mexico.
I dont care about Canada and Mexico! I do care about America and American companies. So the solution is to impose the import tax on any product coming into the US except for American companies!
GM AND FORD would be the only car companies that would qualify! Then watch the us have a advantage!
You forgot Tesla, or perhaps you did so deliberately.
You can never tell with you. Even for someone who is oh-so for GM, you made an exception for Ford, but you also forgot that there’s lots of other non-mainstream automakers and OHV manufacturers.
You’re weakening.
Your right! I forgot about tesla they would also be included. As for getting weak nope I was just trying to be accurate based on the trade issue! Outside of that I still hate all of GMs competition!
Emotions in business are a dangerous feature. For those who have them.
It makes such people prone to be manipulated.
Time to say screw trump..
Why