Category: Trade

By on August 18, 2017

made-in-usa

When Donald Trump took office, one of his first presidential acts was to rally domestic automakers for a series of meetings and promise to remove regulatory barriers. As the administration was a self-described ally to the car industry, the claim appeared genuine. There was some tough talk about foreign involvement but, for the most part, Trump appeared to be in domestic manufacturers’ corner.

As focus shifted toward the renegotiation of the North American Free Trade Agreement, automakers had one request: to not impede cross-border trade. It was their primary concern leading up to this week’s talks.

Two days later and the issue has become a major sticking point; placing auto industry groups from Canada, Mexico, and the United States at odds with the current administration. As NAFTA talks began in Washington, D.C., automaker and parts groups from all three countries began outright pleading with U.S. negotiators to abandon their push for tighter rules of origin. Now they are formally opposing it.  Read More >

By on August 16, 2017

nafta-secretariat

The first round of the North American Free Trade Agreement renegotiations begins on Wednesday. U.S. President Donald Trump, Mexican President Enrique Peña Nieto, and Canadian Prime Minister Justin Trudeau have planned to meet in Washington, D.C. on August 16th and stay through the 20th to discuss trade policy. Afterward, NAFTA debates will be led by U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland, and Mexican Economy Minister Ildefonso Guajardo.

While this all began as a Trump campaign promise to renegotiate a better deal for the United States (or abandon the trade agreement entirely), it has evolved over the last six months into an opportunity to modernize NAFTA policies. There’s no firm deadline for the three countries to reach an agreement, but Mexico is pushing for the process to wrap up before its presidential campaign begins in earnest in February. Read More >

By on August 3, 2017

nafta-secretariat

Mexico and Canada are finally in agreement that NAFTA could use an update, not that the Trump administration gave them much of an opportunity to refuse renegotiations. However, after taking a critical look at the two-decade old agreement, representatives from all three nations have reached the consensus that it’s time for a change.

At Wednesday’s CAR Management Briefing Seminars, Colin Bird, minister-counselor for trade and economic policy at the Canadian Embassy, and Francisco Sandoval-Saqui, a Mexican trade official for his country’s Ministry of the Economy, laid out their country’s agendas for the NAFTA trade talks slated to begin in Washington, DC on August 16th.

Both countries are eager to make cross-border trade more fluid without handing an unfair advantage over to the United States. President Trump has previously accused NAFTA of being “the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country,” and immediately moved to dismantle it upon taking office. While his stance has softened over the last few months and the reins have been handed over to Robert Lighthizer, Trump has remained bullish on the issue — claiming domestic automakers are giving away U.S. jobs and income to Canada and Mexico.  Read More >

By on July 18, 2017

Old Assembly Factory floor

Despite President Trump having initially framed his proposed NAFTA renegotiations as a hardline “America First” endeavor, the administration’s stance has soften significantly. In a recent summary of objectives, U.S. Trade Representative Robert Lighthizer highlighted fairness as the key issue throughout.

Absent were any mention of abandoning the deal if certain conditions were not met and the steep tariffs previously alluded to by the president. In fact, any mention of tariffs specifically targeted their reduction or elimination — for both imported and exported goods. There are, however, numerous examples that reaffirm the Trump administration’s earlier objectives and a handful of inclusions that should please domestic automakers. Read More >

By on June 30, 2017

BMW Spartanburg Assembly Plant Factory

As the Trump administration applies pressure to encourage companies to manufacture goods within U.S. borders and bolster American employment (or potentially face towering tariffs), the president has more recently come out against foreign automakers directly. In late May, Trump responded to criticism from German Chancellor Angela Merkel by accusing her country of having a trade surplus with the United States — claiming its automakers send vehicles to North America while providing little else. Trump has levelled similar criticism at China.

However, there’s a problem with his assertion. Foreign companies may not always contribute the majority of their wealth towards improving the U.S. economy, but they do invest heavily into the country. In fact, a recent analysis of federal jobs data shows two-thirds of the 656,000 manufacturing jobs created between 2010 and 2014 can be attributed directly to foreign investment.

Accurate employment figures for the following years aren’t yet available. But, with an additional $700 billion in capital coming in from non-domestic sources, total foreign investment reached $3.7 trillion by the end of 2016 — a new record.  Read More >

By on June 22, 2017

us-capitol, public domain

U.S. Trade Representative Robert Lighthizer said on Wednesday there was no definitive timeline for completing NAFTA trade renegotiations. Discussions haven’t even begun between the United States, Canada, and Mexico but legislators and executives have already warned prolonged negotiations would likely be detrimental to their interests.

The automotive industry is mainly seeking a swift and unambiguous update that doesn’t rock the boat too severely. Every day there is no consensus on the trade agreement is another day it has to postpone large investments. Ideally, the U.S. wants the redrawn NAFTA to prioritize its workforce and industry, while the Trump administration aims to tax imports and force companies to do more business within its borders. But, with nothing finalized, many automakers are in a holding pattern. Volkswagen, for example, is putting off decisions on major U.S. investments until it becomes clearer what course NAFTA will take.  Read More >

By on May 18, 2017

us-capitol

U.S. Commerce Secretary Wilbur Ross want to begin formal talks to renegotiate the North American Free Trade Agreement with Canada and Mexico in a little over three months, adhering to the campaign pledges made by President Donald Trump last year. Ross explained to reporters that “sometime in the next couple of weeks” he will issue a notice to Congress stating the Trump administration intends to start formal NAFTA negotiations in just 90 days.

However, since he expressed his intentions in front of a gaggle of reporters, Congress is probably already aware. But it won’t be “official” until they get a piece of paper signed by the appropriate parties on the applicable letterhead — hopefully, embossed with a fierce-looking eagle surrounded by dollar signs.  Read More >

By on May 12, 2017

robert_lighthizer 2017

I hope you’re fond of domestic automobiles.

The Trump administration is setting the table to make importing cars more difficult with the U.S. Senate confirming Robert Lighthizer in an 82-14 vote as the U.S. trade representative, prepping the country for an assertive trust from the White House’s America First trade strategy. Read More >

By on May 1, 2017

Ford badge emblem logo

Ford Motor Company thinks it has the answers for the impending renegotiation of the North American Free Trade Agreement. Joe Hinrichs, Ford’s president of the Americas, believes the key to an updated NAFTA includes protections against currency manipulation and the standardization of product regulation between the United States, Canada, and Mexico.

Of course, Hinrichs is just one voice of many. Despite his initial threat of NAFTA’s abolishment failing to pan out, President Trump has maintained a hardline stance — stating he will negotiate a better deal for the U.S. (or pull out if he can’t). Meanwhile, Democratic Senator Sherrod Brown has urged for transparency throughout the process while echoing some of Trump’s campaign promises to stick up for American jobs by not showing favoritism or allowing industries to play against each other.

By contrast, Hinrichs’ proposals are specifically focused on streamlining the auto industry and avoiding long-standing complications associated with financial witchcraft.  Read More >

By on March 2, 2017

ktmbull

Much to the chagrin of a couple of generations of small truck enthusiasts on this side of the Atlantic Ocean, the United States got into a bit of a trade tiff with France and Germany over a protectionist tariff the European countries had placed on imports of American chicken in the early 1960s. The result was a 25-percent tariff levied on potato starch, dextrin, brandy, and light trucks imported into the U.S. Brandy was listed to retaliate against the French while the light truck duty targeted commercial versions of the VW Type II.

Due to another trade dispute over a different foodstuff, in this case beef, the Office of the United States Trade Representative (OUSTR) has proposed a 100% tariff on small to medium displacement motorcycles and scooters manufactured in the European Union. Motorcycles and scooters from 50 to 500 cc displacement were tucked in at the end of a long list of beef, pork, and other food products covered under the proposed duties. Read More >

By on February 14, 2017

Donald Trump Sr. at #FITN in Nashua, NH, Image: By Michael Vadon (Donald Trump Sr. at #FITN in Nashua, NH) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Since the inauguration of U.S. president Donald Trump, Canadian political and auto industry officials have taken every opportunity to highlight the economic prosperity and millions of jobs that depend on cross-border trade. And the lobbying seems to have paid off.

At a joint press conference following the first official meeting Monday between Trump and Canadian Prime Minister Justin Trudeau, the U.S. leader praised the economic ties between the two countries.

“We have a very outstanding relationship with Canada. We’ll be tweaking it,” said Trump. “We’ll be doing certain things that are going to benefit both of our countries.”

At the same time, he took a swipe at the trading relationship with Mexico, calling it “unfair to the United States.”

Read More >

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