By on December 20, 2019

us-capitol, public domain

The House of Representatives approved a new North American trade deal on Thursday, causing many to breathe a sigh of relief. The House vote sends the measure to the Senate, with the probable outcome of it being pushed through.

When is another matter, however, as Senate Republican leader Mitch McConnell said the measure would likely be taken up after an impeachment trial. That means we’ll be waiting until 2020. Still, the U.S. Mexico Canada Agreement (USMCA) is one step closer to replacing the North American Free Trade Agreement (NAFTA). Barring a governmental curveball, the automotive industry now knows what to expect.

The House approved legislation to implement USMCA by a 385 to 41 vote — with 193 Democrats and 192 Republicans supporting the pact. Changes from NAFTA are vast, with USMCA updating provisions for the internet, e-commerce, digital services, and other industries that didn’t exist in the 1990s.

For automakers, new rules stipulate that 75 percent of auto content be made in North America — up from NAFTA’s 62.5 percent. Additionally, 40-45 percent of all vehicle content is required to come from employees earning at least $16 an hour to qualify for tariff-free treatment. Provisions were also made to support the rights of Mexican line workers. Otherwise, the $1.2 trillion annual trade route is going largely unaltered.

 

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16 Comments on “House Passes USMCA Trade Deal, Replacing NAFTA...”


  • avatar
    28-Cars-Later

    So, lipstick on a pig.

  • avatar
    ToolGuy

    I can relax now, knowing that the smartest people in the country are making unbiased, wise and rational decisions which will affect my future, and that they all only have my best interests in mind.

  • avatar
    dont.fit.in.cars

    Watching all the car parts builders chased to China wasn’t in workers best interest in the late 90’s.

  • avatar
    jkross22

    Matt, what will this mean for Chinese made vehicles like GM’s SUVs and Volvo S90? Are they getting hit with a perma-tariff? And what about the Chinese produced parts that are used to make cars in North America – will production of these parts get repatriated to Cancun or Dearborn or the Great White North?

    If the US government was genuinely committed to US or North American produced vehicles, they would mandate that car buyers see on the window sticker the cost of the tariff as a line item.

  • avatar
    DenverMike

    All (new car) auto dealers are corrupt until proven otherwise, even Toyota dealers. It’s the nature of the beast.

    Show me anyone paid on commission that isn’t trying to maximize their pay and or a dealer that hates it and the added revenue.

    • 0 avatar
      ToddAtlasF1

      Maximizing profit is corrupt in and of itself to you? Your Marxist professors sabotaged you well.

      • 0 avatar
        SoCalMikester

        buying up drug patents and raising prices 1000% maximizes profits too, quite easily.

        • 0 avatar
          ToddAtlasF1

          Why don’t you do it then? You can spend the profits on carbon credits to keep someone else from making a living while you’re at it.

        • 0 avatar
          28-Cars-Later

          Shkreli is in jail for securities fraud for those sorts of antics.

          • 0 avatar
            commeatus

            No he’s not, he’s in jail for unrelated fraud that came out at the same time. The price jacking is 100% legal–it happened to be epipen around the same time, too.

          • 0 avatar
            golden2husky

            Yes, price jacking is legal. And for non-essentials, who cares. You want to pay $5K over sticker? Go for it. But when it comes to things like energy and pharmaceuticals – you know, things essential to living – it should be illegal. Uncontrolled capitalism is as dangerous as unbridled socialism though there are those here who think otherwise. Maybe (hopefully?) they will get the pleasure of being diagnosed with a disease that those wonderful capitalists will keep in check for $5K a month – hope your HELOC has a low balance. Anybody who thinks this is fine has never seen what this does to families. We need a mixed capitalist society where controls are used appropriately to ensure we don’t end up where we were during the robber baron era of the Industrial Revolution.

      • 0 avatar
        DenverMike

        Dealers expect that you don’t know what you’re buying or servicing (until you’ve proven otherwise). Most victims don’t even know they were ripped off, paying more than they needed to, sold things they didn’t need, paid too much for them when they did, wrongly denied warranty coverage, wrong parts replaced, car owner pays anyway, interest rates jacked up from the lender deal, and the list goes on.

        They’re all independently owned and not your friends. I’ve worked at many dealerships, including Toyota and know a lot of their dirty tricks.

  • avatar
    sportyaccordy

    It all comes back to my ill fated Kia Optima purchase.

    – Be honest with who you are as a car guy. When I totalled my G at the track I thought I could leave fun cars behind. Bad idea.

    – Test drive multiple cars, even if you have your mind made up on one. ESPECIALLY if you have your mind made up on one.

    – Analyze your needs and operational freedoms.

    If I could do it all over I would have got something like a Corvette to daily drive and a big cheap sedan for the 10 minutes a day I need a back seat. Oh well. TLX is good to go. You live and you learn

  • avatar
    Arthur Dailey

    Should in theory help the auto sector in Canada, but too late for Oshawa.

    As @Slavuta posted, it makes manufacturing in Mexico more expensive. But is it that much more that more manufacturing will return to the USA and/or Canada?

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