Trump officials weigh 25% tariff on imported cars to force concessions in NAFTA talks

05/23/2018 LA Times

Washauto06_bmw_325_AudeVivereThe Trump administration is considering new tariffs on imported cars in a move that trade analysts said was designed to put pressure on Mexico during the final stages of negotiations for a new North American trade deal.

Officials may cite national security grounds to justify a 25% tariff on imported vehicles, a senior administration official said, speaking on the condition of anonymity to discuss internal deliberations. President Trump used the same provision of U.S. trade law in March when he called for tariffs on foreign-made steel and aluminum.

An announcement of a formal investigation into the purported need for such industrial protection could come as soon as Wednesday evening, one industry executive said. Shares of European carmakers fell more than 1% on the news.

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Mazda and Mexico Would Be Hit by U.S. Car Import Crackdown

05/24/2018 Bloomberg

automobileAutomakers including Mazda Motor Corp. and countries led by Mexico should buckle up: their car businesses could be in for a bumpy ride, thanks to U.S. President Donald Trump.

Trump instructed his Commerce Secretary Wilbur Ross to consider conducting an investigation into whether auto imports are weakening the American economy and may impair national security. The Commerce Department said shortly after the White House’s statement issued late Wednesday that it’s beginning the probe.

Mexico — by far the largest source of U.S. auto imports — would be most affected if the Trump administration implements any protectionist measures, which could include tariffs the president has floated for months. Canada, Japan, Germany and South Korea would be the next most affected.

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Negotiations over NAFTA are bogging down ahead of a major deadline

05/09/2018 The Washington Post

automobileNegotiations over a new North American trade deal have hit a major snag, leaving White House officials increasingly uncertain of their ability to hit their May 18 deadline for securing congressional approval of a new deal before year’s end.

The main stumbling block involves a dispute over determining which automobiles are given duty-free treatment under the agreement, according to five industry and U.S. government sources.

After almost nine months of negotiations, the United States and its trading partners , Canada and Mexico, remain far apart on a host of contentiousissues, including U.S. demands that the treaty must be renewed every five years.

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Mexican Auto Industry Opposes Latest U.S. Proposal on Nafta Rules

04/30/2018 The Wall Street Journal

automobileMexico’s auto manufacturing industry on Monday rejected a proposal presented last week by U.S. trade authorities that would impose new rules on the origin of components used in cars and pickup trucks sold tariff-free under the North American Free Trade Agreement.

Last Thursday in Washington, the U.S. Nafta negotiating team presented a proposal requiring 40% of the parts used in light vehicles and 45% of parts used in pickup trucks to originate in high-wage countries, according to Eduardo Solis, president of the Mexican Automotive Industry Association, known as AMIA.

Canada sees progress on NAFTA auto rules; steel tariffs loom

04/25/2018 Reuters

Chystia_Freeland_2016Canadian Foreign Minister Chrystia Freeland said on Wednesday that good progress has been made at the NAFTA trade talks on the key issue of auto rules, though the threat of proposed U.S. steel and aluminium tariffs coming into force next week clouded the mood.

Freeland, U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo met for a second straight day in a push to seal a quick deal on revamping the North American Free Trade Agreement.

“There is a very strong, very committed, good-faith effort for all three parties to work 24/7 on this and to try and reach an agreement,” Freeland told reporters after talks with Lighthizer.

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In Mexico’s own Motor City, billion-dollar investments but also fear of Trump’s trade moves

04/23/2018 Los Angeles Times

Guanajuato by flickr user magnusvk
Photo by Flickr user Magnusvk

In a swath of Mexico locals call the “New Detroit,” General Motors is hiring hundreds of workers and expanding operations at a truck factory. BMW is on track to finish building an assembly plant next year.

Just last month, Canadian parts manufacturer Linamar announced it would pour $50 million into expanding operations at two of its Mexican plants.

Still, President Trump’s tough talk on trade has rattled El Bajio, as this industrial region in central Mexico is known, to its core.

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U.S. Seeks Quick Nafta Deal, but Allies Balk as It Gives Little Ground

04/11/2018 The New York Times

manufacutiringThe Trump administration is pushing to reach a deal on the North American Free Trade Agreement by the beginning of May. But the timeline could be complicated by its refusal to budge from contentious proposals aimed at bringing manufacturing back to the United States.

The administration has not significantly softened its position on rules that automakers would need to meet to qualify for zero tariffs under Nafta, according to a summary of the American proposal reviewed by The New York Times. While the administration has removed a requirement about the percentage of a car that must be made in the United States, it has added other rules that North American automakers say could be costly and complicated to meet.

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