Tag: NAFTA

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 June 1, 2017

Volkswagen Atlas in front of Chattanooga sign, Image: VW

Volkswagen’s sole U.S. assembly plant was spared any fallout from the company’s wildly expensive diesel emissions scandal, but the upcoming North American Free Trade Agreement negotiations could see VW throttle back its future plans for the facility.

The Chattanooga plant, which builds the Passat and Atlas, has seen $900 million in investment over the last couple of years. More models are anticipated, and the automaker said it expects the plant to reach full production by 2020. However, recent threats of an import tax to be levied on German automakers has VW brass in wait-and-see mode before sending any new models or money to Tennessee. (Read More…)

By on May 30, 2017

[2015 Mercedes C-Class, Image: Daimler AG]

Call it the Americanization of Mercedes-Benz. While the German automaker has assembled C-Class, GLE and GLS models in Alabama for some time (and, more recently, Sprinters in South Carolina), recent pressure from the Trump administration has led the automaker to reconsider what goes into those vehicles.

After being characterized by President Trump as “very bad,” it’s possible other German automakers operating in the U.S. could follow Mercedes’ lead in a bid to avoid further heat. (Read More…)

By on May 23, 2017

lansing assemblyl

As the clock counts down to the beginning of talks aimed at revamping the North American Free Trade Agreement, automakers in Mexico, the U.S. and Canada know one thing they don’t want to see changed — rules of origin.

Auto manufacturers must abide by minimum regional (NAFTA-wide) content rules in order for vehicles to remain free from import tariffs. President Trump’s proposed reforms aim to benefit U.S. companies, but could lead to greater costs heaped onto automakers — something no profit-minded company desires.

Naturally, automakers wants their feelings known well before the three countries get down to brass tacks. (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 9, 2017

bob king

The former president of the United Automobile Workers, Bob King, says he supports President Trump’s plan to reconfigure the North American Free Trade Agreement — so long as it maintains labor’s best interests. Ironically, King’s support of the president’s trade plan came as he attended an Ann Arbor rally in support of an EPA testing facility in danger of being closed due to Trump administration budget cuts.

King, who served as the union’s president from 2010 to 2014, faults the trade pact for a loss of American jobs. It’s his belief that NAFTA allowed automakers to invest in more-affordable regions — like Mexico — at the expensive of the United States’ workforce. His successor, Dennis Williams, has echoed these claims and also wishes to see NAFTA reformed.  (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 31, 2017

Bob Lutz

If you’re unfamiliar with Bob Lutz, it’s likely that you’re a recent addition to the world of automotive enthusiasm. Allow me to be the first to welcome you. The rest of us have been following Lutz’s career shift from extremely outspoken auto executive to extremely outspoken car blogger for years. Now 85, he hasn’t become any less critical of the industry after entering his “retirement,” nor has his advanced age done much to soften his frank rhetoric.

Love or hate him, Lutz’s time spent jumping between the Big Three has provided him with unique insights — and he always has plenty to say on the current state of the American automotive industry. His most recent revelations circle around the unsustainable nature of Tesla and his growing distaste for president Trump, despite his having voted for him.  (Read More…)

By on March 31, 2017

Donald Trump

The Trump administration is changing its tune regarding the North American Free Trade Agreement.

Despite the president calling the pact the “worst deal” in history throughout his campaign and hinting his goal was to abandon the agreement, the White House intends to keep numerous provisions while seeking more moderate changes.

Among the more controversial arrangements Trump intends to keep are the arbitration panels that permit investors in the three nations to circumvent local courts to resolve civil claims. The administration even has a proposal that would improve these bodies’ procedures to resolve disputes.

Is this the bold trade overhaul that Trump promised on the campaign trail? (Read More…)

By on March 22, 2017

U.S. Mexico Border

Now that Mexican negotiators aren’t reacting specifically to President Trump’s heated rhetoric over foreign trade policies, their terror and rage has begun to subside. The North American Free Trade Agreement might even continue to exist for the time being.

Trump’s previous attacks on NAFTA, import tariff threats, and promise of a border wall incensed Mexican officials to a point where many suggested Mexico should simply abandon the renegotiation talks on principle. However, now that cabinet officials will be speaking on behalf of the president and the focus of the negotiators have shifted toward the fundamentals — and not the politics — Mexico can relax a little.  (Read More…)

By on February 27, 2017

U.S. Mexico Border

Ildefonso Guajardo, Mexico’s senior trade negotiator, reaffirmed his position to break off talks to reconfigure NAFTA, saying his country will completely abandon talks if the United States continues threatening levies and caps on products coming in from its southern border. He said Mexico will refuse to even consider the kind of tariffs President Trump has discussed and revert back to World Trade Organization rules. Under those guidelines, the most the U.S. could impose on a Mexican product would average 3 percent.

“The moment that they say, ‘We’re going to put a 20 percent tariff on cars,’ I get up from the table,” Guajardo said in an interview. “Bye-bye.” (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…)

By on February 13, 2017

Donald Trump

After several weeks spent wondering just how the continent’s trade landscape will look after president Donald Trump renegotiates the North American Free Trade Agreement, the business world now has a slightly clearer picture of where the pieces may land.

Trump spoke briefly about his trade goals with both Mexico and Canada after meeting with Canadian Prime Minister Justin Trudeau at the White House. (Read More…)

By on February 6, 2017

Automakers are waiting with bated breath to see where the pieces land once President Donald Trump complete’s the country’s trade revamp. One proposal would see a border tax of 20 percent placed on goods imported from other countries — a move that would impact the cost of manufacturing vehicles, and buying them.

Not every automaker would see a similar financial hit. Domestic manufacturers that use a high degree of parts built in the U.S., especially those that build few models in Mexico for delivery in the States, wouldn’t see much on an impact. For those that import most or all of their U.S. fleet from foreign factories, the cost per vehicle could be enormous. Customers, of course, would need to make up the difference.

While the tax proposal might come to nothing, a recent study shows what consumers could expect to see on window stickers if the idea becomes policy. (Read More…)

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