Donald Trump to collide with car industry over Nafta renegotiations
GETTY Trump's administration is set to collide with the car industry over the Nafta trade pact
More than any other industry, autos have been the focus of President Donald Trump's anger over the North American Free Trade Agreement, which he blames for taking car factories and jobs away from America to low-wage Mexico. The United States had a $74billion trade deficit with Mexico in cars and car parts last year, the dominant component of an overall $64billion US deficit, according to US Census Bureau data.
“The Trump administration has framed their Nafta negotiating objectives around reducing the trade deficit with Mexico,” said Caroline Freund, a senior trade fellow at the Peterson Institute for International Economics. “If they don't touch autos, there's no way of getting at what they want.”
If they don't touch autos, there's no way of getting at what they want Caroline Freund, senior trade fellow at the Peterson Institute for International Economics
Among tools that US Trade Representative Robert Lighthizer may seek to boost auto employment in the US is strengthening the rules of origin to shut out more parts from Asia, and possibly an unprecedented US-specific content requirement for Mexican vehicles. Representative Lighthizer's negotiating objectives for Nafta seek to “ensure the rules of origin incentivise the sourcing of goods and materials from the United States and North America,” which has raised concerns among auto industry executives and trade groups that he will seek a deal that guarantees a certain percentage of production for the United States.
GETTY Autos have been the focus of Trump's anger over the North American Free Trade Agreement