The Trump administration on Thursday estimated that its recent North American trade deal will generate 76,000 automotive sector jobs under five years as automakers invest some $34 billion in new plants to adhere to the pact’s new regional content regulations.
The forecasts from the U.S. Trade Representative’s office were released before an independent trade panel’s hotly anticipated analysis that economists expect to show little or no U.S. gains from the recent U.S.-Canada-Mexico Agreement.
A USTR official informed reporters that the jobs and investment estimates are based on strategies disclosed by automakers to the trade agency for compliance with the new agreement’s tighter rules of origin. These require 75 percent of a vehicle’s content to be produced in North American, with 40-45 percent produced in high wage areas, namely the United States or Canada.
A senior USTR official told reporters that none of the 15 automakers producing vehicles in North America aim to opt out of the agreement to pay U.S. tariffs instead and shift production overseas, as some critics of the deal have suggested.
“They have verbally committed to us that they intend to adhere to the rules,” the official stated. “And they have told us that this is not going to have major upward pressure on vehicle prices.”
The estimates consist of about $15.3 billion investments earlier announced by Fiat Chrysler, Ford Motor, General Motors, Toyota, Volkswagen, and SK Innovation.
