Donald Trump Still Doesn't Understand How NAFTA Works

Mark Stevenson
by Mark Stevenson
donald trump still doesnt 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)]

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  • Chocolatedeath Chocolatedeath on Mar 07, 2016

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

  • HotPotato 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!

    • See 1 previous
    • Highdesertcat 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.

  • SCE to AUX Probably couldn't afford it - happens all the time.
  • MaintenanceCosts An ugly-a$s Challenger with poor equipment choices and an ugly Dealership Default color combination, not even a manual to redeem it, still no sale.
  • Cha65689852 To drive a car, you need human intelligence, not artificial intelligence.Unfortunately, these days even human brains are turning into mush thanks to addiction to smartphones and social media.
  • Mike1041 A nasty uncomfortable little car. Test drove in 2019 in a search for a single car that would appease two drivers. The compromise was not much better but at least it had decent rear vision and cargo capacity. The 2019 Honda HRV simply was too unforgiving and we ditched after 4 years. Enter the 23 HRV and we have a comfy size.
  • SCE to AUX I wonder who really cares about this. "Slave labor" is a useful term for the agendas of both right and left."UAW Wants Auto Industry to Stop Using Slave Labor"... but what will the UAW actually do if nothing changes?With unrelenting downward pressure on costs in every industry - coupled with labor shortages - expect to see more of this.Perhaps it's my fault when I choose the $259 cell phone over the $299 model, or the cheaper parts at RockAuto, or the lower-priced jacket at the store.Do I care about an ethical supply chain? Not really, I just want the product to work - and that's how most consumers are. We'd rather not know.Perhaps the 1990s notion of conflict-free, blood-free, ethically-sourced diamonds will find its way into the auto industry. That would be a good thing.