Wednesday, April 4, 2018

Trump's extreme proposal and how it will affect NAFTA

under the current NAFTA about 62% of the parts in a car sold in North America must come from the region, it doesn't matter if the parts come from Canada or Mexico or the U.S. but they must be sourced from within the country. Trump's trade team wants to raise that number up to 85%, Trump's negotiators are proposing that half of the auto parts sourced from North America come from the United States and the rest go to Mexico and Canada. Trump's greediness is going to make a lot of enemies for him, if this goes through it means that the U.S. gets half and Mexico and Canada both only get a quarter. Mexican economy secretary Ildefonso Guarjado told CNNMoney last April that a U.S. specific rule would be unacceptable. In November, Canadian foreign minister Chrystia Freeland referred to this as one of Trump's extreme proposals and that Canada would not agree to this. The amount of vehicles and auto parts that come into the U.S. from Mexico make up the vast majority of the U.S. trade deficit with Mexico and Trump's top priority for a new deal destroys that deficit.

2 comments:

  1. I found this shocking but at the same time not shocking that he would destroy the vast majority of the U.S. trade deficit with Mexico.

    ReplyDelete
  2. Obviously this is a bad idea and most likely won't be approved. But I wonder how much more money the United States would make if it did get approved.

    ReplyDelete