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Auto Industry to POTUS: Don’t Withdraw from NAFTA

October 28, 2017 0 Comments

Major auto manufacturers, suppliers, and dealers on Tuesday launched a new coalition urging President Trump not to withdraw from the North American Free Trade Agreement.

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The coalition – dubbed “Driving American Jobs” – is made up of industry trade associations representing General Motors Company, Toyota Motor Corporation, Volkswagen AG, Hyundai Motor Company, Ford Motor Company, and other major automakers. The coalition is also backing an ad campaign with an aim to convince the White House and American voters to keep NAFTA, which is crucial to boosting U.S. auto sector production and jobs.


Trump has threatened to withdraw from the trade deal among the U.S., Canada, and Mexico, despite the deal being “heavily utilized” by automakers, with production and supply chains across all three nations.

Last week, in the most recent talks on NAFTA renegotiation, Trump “proposed changes to the rules of origin for autos” – the rules used to determine how much of a vehicle is made in a certain place. Automakers found the proposed changes to be “untenable” – a sentiment shared by both Canada and Mexico.

The auto industry joined the U.S. Chamber of Commerce and other business groups in opining on Trump’s efforts to alter NAFTA, saying the president’s proposed changes would be “detrimental to American jobs.”

The coalition, which includes the Motor & Equipment Manufacturers Association as well as the American International Automobile Dealers Association, said that withdrawing from the 23-year-old agreement, which underpins $1.2 trillion in annual trade among the U.S., Canada, and Mexico, would “put U.S. auto sector jobs at risk.”

The coalition referenced the $9.5 billion in new investments by the automotive and auto parts sectors, as well as featured personal automotive sector employee stories. “We need you to tell your elected officials that you don’t change the game in the middle of a comeback. We’re winning with NAFTA,” the coalition stated on its website.

The campaign comes as concerns about the Trump administration continue to rise, with the coalition and its supporters worried that the administration could opt early to withdraw from NAFTA after six months’ notice. If this possibility came to fruition, automakers building trucks in Mexico would become exposed to high tariffs, and new tariffs would be added on vehicles and parts made across North America.

In a Fox Business Network interview that aired on Sunday, Trump said he believes the deal will “probably” be renegotiated, but that he’ll withdraw if the renegotiated deal is unfair. He reasoned, “We can’t allow the world to look at us as a whipping post. Not going to happen anymore.”

The U.S. Chamber of Commerce has accused the Trump administration of trying to sabotage the NAFTA talks by using poison-pill proposals such as demands for more “favorable treatment for the U.S. side on car production” and a sunset clause to force regular negotiations..

Earlier this month, U.S. Trade Representative Robert Lighthizer said the Trump administration wanted a fair agreement, but that he thus far had “seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits.”

Under NAFTA as it currently stands, at least 62.5 percent of car and light truck materials produced in Mexico must be from North America in order to hit the marketplace free of tariffs. The Trump administration has proposed raising that content minimum to 85 percent, as well as “securing 50 percent of the total for the United States.”

Filed in: Featured, Legal/Politics • Tags: , , , ,

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The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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