A diverse coalition of auto industry groups has formed to fight threatened changes by the Trump administration to the North American Free Trade Agreement (NAFTA). U.S. negotiators have said they want to raise the North American content requirement for cars from 62.5 percent to 85 percent, with 50 percent of the total from the United States.
President Trump said in interviews with Forbes and the Fox Business Network earlier this month that he will withdraw from the agreement if it is not fair to the United States. “We can’t allow the world to look at us as a whipping post,” Trump told Fox. He promised many times on the campaign trail that if elected, he would withdraw the U.S. from NAFTA.
The auto industry, alarmed, formed a coalition earlier this week to publicize its opposition to the U.S. position. Members are the American Automotive Policy Council (AAPC), which lobbies for the Detroit Three automakers; the Alliance of Automobile Manufacturers; the Association of Global Automakers, AIADA and the Motor Equipment Manufacturers Association (MEMA).
“There’s no question that NAFTA has helped advance the global competitiveness of the U.S. auto industry sector,” said Missouri Governor Matt Blunt, president of the AAPC.
Added Jennifer Thomas, vice president of federal affairs at the Auto Alliance, “Pulling out of NAFTA would lead to a decrease in vehicle production, a decline in jobs and an increase in what our customers spend when buying a new vehicle.” She said many automakers would move production outside North America and pay the import tariff rather than adhere to stricter domestic content requirements.
Among the vehicles from U.S.–based automakers that would be hit with a tariff when imported to the U.S. from Canada or Mexico are the Cadillac XTS, Ford Fusion, Chrysler Pacifica and GMC Terrain.
Both Canada and Mexico have expressed displeasure with the United States’ hardened negotiating stance. Talks resume in Mexico November 17.Download Bulletin PDF