The New NAFTA Deal, USMCA, Is Now In Effect22
The Trump administration has long criticized the North American Free Trade Agreement (NAFTA), calling for an outright replacement and renegotiation in a bid to boost domestic manufacturing operations. Now, the NAFTA replacement, also known as the USMCA, has gone into effect.
North American leaders signed the NAFTA replacement late in 2018. Dubbed the United States-Mexico-Canada Agreement, or USMCA, the new deal replaces NAFTA outright, the latter of which was established in 1994.
The new USMCA deal contains four big measures that will impact automakers, the first of which includes new requirements for the origin of automotive parts used in production. Under NAFTA, automakers were required to use North American-made parts for 62.5 percent of vehicle content in order ensure duty-free imports. Now, the new USMCA deal stipulates that 75 percent of the parts used be North American-made by 2023, with the intention being greater utilization of North American-made automotive parts during production.
The new deal also stipulates that automakers must manufacture 40 percent of their vehicles in facilities where workers earn wages of at least US$16 per hour. The average pay rates are higher in the U.S. and Canada, but lower in Mexico.
What’s more, Mexican governing bodies must allow workers to form collective bargaining units, or unions.
Finally, the USMCA deal includes side letters from the U.S. to Canada and Mexico that lays out exemptions from future tariffs imposed by the U.S. on some vehicles and automotive parts, including all Mexican-made light trucks, 2.6 million Mexican passenger vehicles, and billions of dollars worth of auto parts from Mexico and Canada.
All of these measures are designed to increase automotive production operations in North America, including an increase in auto manufacturing in the U.S. However, it’s also likely these measures will result in higher production costs for automakers, which will mean higher prices for consumers in the long run.
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One thing to remember also is that USMCA is good for America and even bigger than the deal with China.
Thank you President Trump for doing away with NAFTA!!!!!!!!
what happened to “if you sell it here, build it here”?
or was that just nonsense like “mexico will pay for the wall”?
Steve, get real. Nobody but fools like yourself believed that Mexico was writing a check. The overwhelming majority of Americans don’t care who pays for it just as long as it gets built. Everyone with half a brain knew what he meant and that is with a new trade deal America would prosper enough to have the wall paid. On a side note, the 15-20 billion he asked for is the the equivalent of a penny in your pocket. Go have a drink and enjoy the Fourth.
are you saying my great stable genius president is a liar?
go back to san francisco you liberal wine sipping elite!!!!
Sour grapes! What did Obama do for the UAW???? NOTHING!!
Amazing how many here still want the dreadful sell out of America NAFTA. Or am I missing another interpretation of the down arrows to my comment?
NAFTA SUCKED!! Listen to the loud sucking sound of jobs leaving America!! Signed, sealed, delivered by Bill Clinton!!😤😤😤
The funny thing is the USMCA deal is mostly just NAFTA updated with with terms already pre-negotiated with the Obama administration through the trans-pacific partnership negotiations. A trade deal that Trump actually backed out of but (the other countries) went ahead despite the USA (now called CPTPP). The original NAFTA deal took over a decade to negotiate and work out. To actually think that the framework for the USMCA was done by the Trump administration would be very short sighted. And most of the new points of USMCA were actually pushed for by Canada and Mexico to modernize NAFTA. Hence why Mexico and Canada were very quick to ratify the agreement.
Dream on toad tell me where its NAFTA adjusted? I mean seriously, you cant because you dont know and are only repeating some line from CNN or another LSM outlet… liberals are such losers. Taking credit for things they didn’t do and often worked against. My comment to you is “you didn’t build that!!”
TPP was trash as it was a collective agreement and our interest lie in negotiating with each nation individually. DemoRats are globalists and so they do not care about America. They see “other” nations as deserving of US wealth and America as the bad guys, thus the bowing to our enemies, going on a global “apology tour”, giving the Iranians $150B in cash, or allowing our border to be overrun, allowing the creation of ISIS and letting them take over 1/2 of the middle east, such great “leaders”. Don’t kid yourself, Trump negotiated a deal that was good for America which neither Barry Soetoro, Kerry, or Mrs. ClintStone did a thing on any of these and they had 8 years to do it… no they’re a joke and have been rightfully erased.
Your comments wreak of cowardice as every nation looks out for their own interests, why should America not, especially when we’re the only nation in the history of mankind to conquer the world to free it… 2X. If you care about the world, a healthy and thriving America is GOOD for the rest of the world… Pathetic…
i hope that $16/hr wage average means mexican workers stop being treated like slaves.
maybe their hourly wage will jump to $5 or $6/hr. wooo hooo!!!
Why, their standard of living I different there in those areas I imagine
This is GREAT for America and also good for Mexico, Mexican citizens as well as Canadians. Problem for Canada is the union there has notoriously been difficult to deal with so I expect auto mfg there to disappear. However Mexican citizens are going to get raises which improves their lives, the communities where they live and make it a better quality of life for them, its a win/win.
The content clause also improves mfg in the NA region and decreases the use of parts mfr’d elsewhere (nee: China) which improves the mfg supply chain that has been seriously crimped in the last 20 years.
Trump has been huge for America and NA in general regardless of the DemoTrash Party of liars.
It is a joke for the government to dictate wages. It changes nothing. All its going to do is raise the costs for everything including housing due to inflation overtime. Unions have served their purpose in the states. Maybe Mexico actually needs unions. The construction industry I work in would be completely different if we had unions that forced our clients to build and/or renovate so that we have a job. Basically all the auto unions in the states make it difficult.
All of that to say that the consumers will get a more expensive car that has gone up faster than their wages due to inflation.
Outside of that I am truly glad that this deal is in effect. This will be great for Canada, Mexico, and USA. We are all peaceful neighbors and should support each other through trade and business. Instead of going across the pond to build or trade more. Hopefully the three countries over the next few decades become a formidable north american economic force.
This is a much better deal than that dreadful disgrace called NAFTA which hurt america piece by piece.
I’m optimistic to see how well it will do. The NAFTA trade deal like the trans pacific deal was all hurting our economy.. Under the Obama administration jobs set sail to China by the thousands.. I’m not against having jobs overseas or in Mexico, but I was upset that we build cars in China when we had the means to build it her and turn it around and sell it back to Americans. That was a backslap to Americans, and I know it’s “just business” but I’m glad to have someone in office that does put America first.. if we take care of ourselves first we can can properly help other countries..
I still refuse to buy a car assembled in Mexico. My last few cars:
01 Toyota Conquest (make in Durban, South Africa- Dad forced me to get it!)
04 Jeep Cherokee 3.7 (RHD): Toledo, OH
05 Chrysler Neon 1.6 (RHD): Belvidere, Ill
09 Cadillac CTS 3.6 (RHD): Lansing, MI
07 Cadillac SRX 3.6 (RHD): Lansing, MI
13 Cadillac ATS 3.6 (LHD): Lansing Mi
15 Cadillac ATS4 3.6 (LHD): Lansing, MI
I wont buy a GM or any other car not assembled in USA! I rather US workers get paid for making it than china or Mexico workers. Sending our dollars out of the country helps no one here that matter. No I don’t care about executive bonuses and dividends, the car still costs us the same as a USA built car no mater what 3rd word country its made in.
I’m with you. I’m the only immigrant at my workplace, yet I’m the only person which drives a US brand car made in the US (some drive Japanese cars made in the US and one drives a Dodge Ram truck made in the US). The lack of loyalty to US made cars and US brands is disappointing. Especially sad to see “progressives” who go on and on about how wonderful unions are avoid UAW made and go for cars made in Japanese or European transplants with no unions (I’m not pro-union, but the hypocrisy is startling!)
MY loyalty is to the US worker, not the manufacturer. Nissan issues paychecks to my fellow Tennesseeans while GM writes checks to Chinese workers. Hyandai writes checks for workers over in Alabama, while Ford writes checks to Pedro and Maria.
And before someone mentions profits “going back to” [inserte country here], call your broker. You can buy all the Honda, Fuji/Subaru, Nissan, or Hyundai stock you want, and get dividend checks.
Patrick/Dadriver/Grizz – While I support everything you said and admire you all for “Buy USA” check the content of your USA made vehicles. I know the ATS had at least 19% China made components… still assembled here but…. just sayin’…..
So basically more of the same…. in the end, this renamed policy will benefit Mexico the most.
Higher % will now be required to be made in “North America”, great… now businesses will just look at the three countries for the cheapest labor rates and go there. Hmm, I wonder which country will that be?
Bottom line for us the consumer:
“However, it’s also likely these measures will result in higher production costs for automakers, which will mean higher prices for consumers in the long run.” -GMA