North American leaders gathered at the G20 Summit in Argentina last week to sign the USMCA trade deal. President Trump, former Mexico President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau each signed the NAFTA replacement at a conference.
The new trade deal replaces the 20-plus-year-old NAFTA, which was established in 1994 to create a free-trade zone block between Canada, the U.S. and Mexico. The new deal affects automobiles the most and requires a higher North American parts content for a vehicle to be eligible for free trade. Specifically, the parts content and production skew more heavily towards higher-wage jobs.
President Trump said the new deal benefits all three nations and called it “probably the largest trade deal ever made.”

Photo: Gage Skidmore
Prime Minister Trudeau commented on the trade deal and said it “lifts the risk of serious economic uncertainty that lingers throughout a trade renegotiation process — uncertainty that would have only gotten worse and more damaging if we had not reached a new NAFTA.” However, the Canadian leader said more work needs to be done and urged President Trump to continue work on removing tariffs on steel and aluminum.
The prime minister also said the closure of the Oshawa plant in Ontario, Canada, is a major blow and seemed to link the tariffs with GM’s announcement of job cuts and restructuring. GM did not explicitly name the tariffs and trade policy as a reason to idle four plants in the U.S. and close the Canadian production facility, but it did warn of a “smaller” GM earlier this year amid trade policy uncertainty. The automaker also said the tariffs have cost $1 billion in profit this year.

Photo: Gregory Abraszko
The new deal also expands free trade to new areas. USMCA also includes provisions for e-commerce and informational technology sectors.
Although each leader has signed the trade deal, it will now go to each country’s legislature for approval. The U.S. Congress will vote on USMCA next year before it’s implemented.
Comments
from the LATimes regarding chinese tariffs on american built vehicles :
But Trump’s top economic advisors made clear Monday that no agreement to reduce and remove the tariffs yet existed, despite Trump’s boast.
“We don’t yet have a specific agreement on that, but I will just tell you … we expect those tariffs to go to zero,” Larry Kudlow, Trump’s top economic advisor, told reporters in a conference call from the White House.
Not sure why people are giving you the thumbs down. From what I read the auto portion of this deal is a huge win for Mexico not the USA. GM will shift a small percentage of parts made in SE Asia to Mexico increasing the percentage made in North America. It will also increase the wage in Mexico to $15 an hour which is 308 peso an hour. Average Mexican makes 38 pesos a day. Basically I would like a job there because it’s like paying a US worker hundreds of thousands a year. Meanwhile we further get the shaft because this will increase the cost of cars to us and give more work to Mexico. So Trump is the worst deal maker ever but that’s no surprise seeing he has failed many times in his own business only to be bailed out by his Dad.
Maybe GM and Ford putting higher-paying jobs in Mexico can improve the Mexican economy and reduce the amount of people heading for the border. It’s sad to see so many people dealing with poverty, and poverty leads to an increase an crime and poor health. I’d like to see GM and Ford build most of their exports in Mexico and move all of their domestic market production to the U.S. and Canada. A trade agreement can’t be all about one country while leaving the others in the dust.
A few observations:
1. The 38 pesos a day is a myth… the average sueldo (salary) is higher.
2. The goal of NAFTA 2.0 was to take reduce reliance on China, rather than to cripple Mexico. In that regard, it does accomplish its mission.
i thought trump was going to use trade threats/leverage to make mexico pay for the wall.
how is that going? or is china going to pay for the wall now?
i think the average mexican autoworker gets paid under $5/hr. that is a joke. if US autoworkers want to know their true worth, that’s it.
I’m sure GM wants tariffs to go to zero, just think of the Chinese built vehicles that could be imported into the United States. There would be no need to build Buick or Cadillac vehicles in North America. They could become like Holden in Australia, just an importer and distributor. Think how many American jobs that could be eliminated. Less sales perhaps, but more EPS and bigger bonuses for top management!