Economy

Trump’s NAFTA Demands Will Cost American Jobs, Study Says

JM Ashby
Written by JM Ashby

Here's a deep, dark irony.

Reuters reported yesterday that Trump's trade officials responsible for renegotiating the North American Free Trade Agreement (NAFTA) are asking for new requirements and a mandate for American-made auto parts, but a new study says that would actually cost American jobs, not create them.

The study commissioned by the Motor Equipment Manufacturers Association says withdrawing from NAFTA altogether could result in the loss of 50,000 jobs in just the auto parts industry, but adding the new content requirements without withdrawing would also cost 24,000 jobs.

Why? Because trade goes both ways. If we withdraw from NAFTA or set new content requirements, North American producers will import more products from Asia because imports from Mexico and Canada will become more expensive.

Mexico and Canada would fare better because they previously charged higher tariffs than the United States and would revert to those levels. And with no trade incentive to manufacture in the United States other than to avoid the 25 percent truck tariff, more full vehicle production would migrate to low-cost countries such as China, auto experts say.

Job losses could be as much as 24,000 if renegotiations lead to requirements for content from North American and specifically the United States, according to the study. [...]

Raising the automotive content thresholds and forcing automakers to verify the North American origin of more electronics and other parts now sourced from Asia would cause some parts manufacturers to forego NAFTA benefits, said Ann Wilson, the association’s head of government affairs.

Instead, companies may ship in more products from low-cost countries outside the region, paying U.S. tariffs ranging from 2.5 to 5.0 percent.

In other words, the best case scenario under Trump is if no changes are made at all. Anything else would be a huge gift to China at the expense of Mexico, Canada, and the United States.

Our own interests should come before those of other nations even in North America, but we're not actually doing ourselves any favors here. Everything the Trump regime is asking for would hurt the American economy. And for what? To appease some nationalistic idea of American pride?

Opinions of NAFTA at its conception in 1992 should not cloud current economic realities in 2017. I feel like I shouldn't even have to say this, but disingenuous opportunists on the right and left spent a significant portion of the past election cycling pretending that NAFTA is the one and only cause of all our collective problems.

My evidence that the trade agreement's loudest critics have behaved like disingenuous opportunists is the fact that I feel like I'm the only one writing about this sometimes. No one seems to care anymore now that a Clinton is no longer on a ballot. NAFTA isn't on anyone's mind even though it was more or less the Theory of Everything less than a year ago.

  • KanaW

    It’s also about revenge against anyone who says (or has said even decades ago) or does (or has done even decades ago) something that Trump feels is nasty to him.

    He ran for President because Pres. Obama dissed him at a correspondents’ dinner, he’s been doing his best to wipe out everything that Pres. Obama ever put into action. Every time someone tweets something he doesn’t like, he’s down on them like a ton of bricks.

    Mexico refused to build a wall at their expense – they must be punished. Canadians have been laughing at him from the beginning – they must be punished. Even comments by someone as bonkers as Kim Jong Un can’t be ignored or laughed at. In Trump’s mind, they must be counterpunched, even to the point of war over a childish slur.

    The man is horrifying.

  • Dread_Pirate_Mathius

    It’s not about saving jobs or helping the economy.

    It’s about appearing to be saving jobs or helping the economy.

    • ninjaf

      And what will look good on a hat or a bumper sticker.