Economy

Trump Trade Officials Insert More Poison Pills Into NAFTA Talks

JM Ashby
Written by JM Ashby

The conservative U.S. Chamber of Commerce accused Trump trade officials of inserting "poison pills" into the renegotiation of the North American Free Trade Agreement (NAFTA) by demanding that American producers be given majority control of auto parts manufacturing for cars assembled in North America, but it's so much worse than that.

According to an exclusive report from Reuters, Trump's trade officials want the new content rules to include American-made steel, aluminum, copper and plastics and, rather preposterously, they also want the content rules to include North American-made electronics.

But, naturally, forcing North American manufacturers to use American metals and plastics and North American-made electronics would give automakers all the more reason to simply import more cars and parts.

Why? Because we simply don't produce those electronics here and we haven't for a very long time.

Three people who were briefed on the matter said that the U.S. rules of origin proposal would put these materials on the North American Free Trade Agreement’s auto parts tracing list for the first time. [...]

Gains from tracing steel and aluminum would be offset by the higher overall content thresholds and the need to find other sources for electronics, said Kristin Dziczek, a trade and labor economist with the Center for Automotive Research in Ann Arbor, Michigan.

Dziczek and auto industry groups say that the U.S. content proposal is likely to backfire, with automakers and suppliers simply choosing to pay the 2.5 percent U.S. tariffs for passenger cars and many parts, sourcing more of them from China and other low wage countries in Asia.

It seems like a very real possibility that the Trump regime's misguided advocacy for American producers will actually harm the industry. Trump regime officials aren't listening to the industry. They're doing their own thing.

I try not to be ageist, but Commerce Secretary Wilbur Ross is reportedly the one pushing for these changes and he is an 80-year-old billionare. I'm just not confident that he has a firm grasp of the modern economy. This isn't 1970. Most people haven't had American-made stereos for 30 years.

  • KABoink_after_wingnut_hacker

    Trump and his clowns have no idea what they are doing. These ridiculous demands will only close American automobile assembly plants and increase foreign made imports.
    I would argue that Ashby’s 30 year estimate is low……I’d say we haven’t had American competitiveness in electronics since the early 60’s.