Donald Trump Still Doesn't Understand How NAFTA Works

by Mark Stevenson

Published: March 6th, 2016

donald trump still doesn t understand how nafta works

Donald Trump, while on the campaign trail in Michigan, is still promising to apply a 35-percent import tariff on vehicles built by Ford if it continues with plans to expand operations in Mexico, even though Trump wouldn’t have the authority to implement a tariff as president, reports The Detroit Free Press.

“We are going to do something that is going to (be) great (and) a very big beneficiary is going to be Michigan,” Trump said while speaking to supporters at Macomb Community College on Friday. “The car business is being abused more than most other businesses. … Mexico is becoming the new China.”

And we all know how much Trump looooooooves China.

From The Detroit Free Press:

In a speech full of references to Michigan’s dominant auto industry and the threats posed by foreign competition and outsourcing, Trump whipped up the crowd at the college Sports and Expo Center in Warren, saying he was “100% sure” a Trump presidency would keep Ford Motor Co. from opening any future plant in Mexico. And he suggested that was just the start for his negotiating better business deals in the U.S. and around the globe to create and save jobs.

(Emphasis mine.)

“Within 24 to 48 hours I will get a call from the head of Ford and he will say, ‘Mr. President, we have decided we’re going to build our new plant in the United States.’ … That’s 100% sure. … They’re going to say, ‘We’re moving back. You want us to move to Michigan?’ And I’ll say, ‘Yeah.'”

However, even as commander in chief, Trump wouldn’t have the legal authority to apply tariffs to Mexican imports protected under the North American Free Trade Agreement. All tariffs, which includes those applied against automotive products defined in the agreement, were lifted by January 1, 2008 or earlier.

Following the speech, Ford reconfirmed its plan to invest $9 billion in U.S. facilities in the next four years.

The latest volley aimed at Ford is a continuation of threat made in June 2015, when the Republican presidential candidate hopeful said, “Let me give you the bad news: every car, every truck and every part manufactured in this plant that comes across the border, we’re going to charge you a 35 percent tax — OK? — and that tax is going to be paid simultaneously with the transaction. They are going to take away thousands of jobs.”

During the same speech on Friday, Trump condemned Japanese imports, even though a number of Japanese manufacturers have set up assembly facilities within the United States.

“I want those cars made in Michigan. The Japanese can do them, but let them make them here,” he said.

This comes after another false claim made by Trump in June 2015, where he stated you can’t find a Chevrolet in Japan.

[Image: Gage Skidmore/Flickr ( CC BY-SA 2.0)]

#35PercentTariff #DonaldTrump #Ford #Mexico #NAFTA #NorthAmericanFreeTradeAgreement #RepublicanPrimaries #Tariff #Trade #UnitedStates

Mark Stevenson

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4 of 287 comments

Chocolatedeath on Mar 07, 2016

SO..we is the article about cars anyway..lol.. I am Neoconservative and all of the candidates scare the hell out of me.

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HotPotato on Mar 08, 2016

There was a good radio piece on the Marketplace radio show today about how Mexican manufacturing wages are now effectively something like 40% lower than Chinese wages. They interviewed a lady who made high-tech fiber-optic parts in a maquiladora (Mexican factory) for a US company. To stay warm in winter, her family had to burn wood in a barrel in the house. And even that bundle of wood cost literally half a day's wages. She and other workers tried forming a union to ask management for better pay. They were all fired. Totally illegal, but the government is weak and consequently so is the rule of law in Mexico, so "chanza gorda" for justice. The wealthy elite and the drug cartels--but I repeat myself!--rule the place. It's not just manufacturing. Indian programmers work cheaper than you do. Chinese engineers work cheaper than you do. Software can do what entry-level lawyers used to do. And the Internet has made it possible to eliminate middlemen such as franchised car dealerships--whew, at least there's one upside!

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- DeadWeight on Mar 12, 2016
  
  Approximate pay of a Mexican auto worker doing work formerly done by U.S.workers whether in assembly plants are automotive (or other) component factories is around $3.50 per hour (vs $18 to $22 per hour for just wages in U.S. plus additional $12 to $18 per hour for health care/retirement plan/other benefits). Mexican industry has been boosted be peso devaluation (now 18 pesos to 1 USD; formerly 9 to 1). Average pay for similar worker in China is $800 USD per month. But even at this relatively low wage, and coupled with China's rapidly cooling economy, other Asian nations such as Vietnam and Thailand are seeing Chinese factories (also Japanese ones such as Denso & Mitsubishi) set up shop instead of in China, because wages are closer to USD $550 per month - so the race to bid lowest labor is hot & heavy in southeast Asia (this spells deep trouble for South Korean mainly unionized auto workers now making roughly $18,000 USD per year when including benefits). As for politics, Trump will sin Ohio by a comfortable margin, and win by 15 to 20 % points in Florida, then going on to win in Wisconsin, Pennsylvania & New York. He then will have by far the most delegates in 3 days (probably well over 700), and mathematically will merely need to win 40 to 45% of remaining delegates in two man race with Ted Cruz (Cruz will then need to win 65 to 70% of remaining delegates just to catch up to and tie Trump).
  
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- Highdesertcat on Mar 13, 2016
  
  @DeadWeight Trump definitely has tapped into the discontent of America's workers all across the political spectrum and created a movement. But the GOP is in total disarray and looking for any means to deny Trump the nomination. Trump personifies the end of the historical GOP, and the GOP knows it. I think Hillary will be the next POTUS because every woman eligible to vote in America will want to see that first woman POTUS.
  
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Recent Comments

1995 SC If the necessary number of employees vote to unionize then yes, they should be unionized. That's how it works.
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