Automakers cautions U.S. tariffs will undermine new NAFTA deal

NAFTA

U.S. automakers and parts suppliers on Thursday cautioned that President Donald Trump’s steel and aluminum tariffs and threatened vehicle tariffs would undermine the advantages of the new deal to modernize the North American Free Trade Agreement, resulting in widespread job losses.

At a wide-ranging hearing prior the U.S. International Trade Commission, labor representatives stated the new U.S.-Mexico-Canada Agreement (USMCA) fails to bring appropriate enforcement of labor standards, while Southeastern U.S. fruit and vegetable growers stated it leaves them vulnerable to subsidized Mexican competition.

The testimony is going to feed into a study by the commission on the economic impact of the trade deal reached on September 30, which could significantly influence support for it in the U.S. Congress. A vote on the pact is not anticipated until the spring of 2019, after a lengthy consultation process.

Several automotive trade groups stated side letters to the USMCA deal that permit Canada and Mexico duty-free auto import quotas in the event that Trump enforces car tariffs was an indication that such a move appeared inevitable.

The Trump administration is thinking about recommendations from the Commerce Department on whether to enforce tariffs on national security grounds under Section 232 of a Cold War-era trade law.

Nothing has been decided on this matter, however President Donald Trump has frequently threatened to enforce 25 percent tariffs on autos and parts to pressure the European Union and Japan to make trade concessions.

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