Money U.S. automakers warn Trump’s ‘extreme’ demands threaten NAFTA talks, say deal fuelled their comeback

20:36  09 november  2017
20:36  09 november  2017 Source:   thestar.com

Trudeau TPP stance affects NAFTA: experts

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WASHINGTON— NAFTA has helped fuel the comeback of the big American automakers , and those three companies are “very concerned” that the renegotiation will collapse because of President Donald Trump ’ s “ extreme ” demands , a representative said Thursday.

U . S . automakers warn Trump ’ s ‘ extreme ’ demands threaten NAFTA talks , say deal fuelled their comeback . Mid-term report card: From Indigenous issues to tax reform, here are the details of Liberal mandates.

New Ford Edges sit on a production line at a plant in Oakville, Ont., in a Feb. 26, 2015, file photo.© THE CANADIAN PRESS/Chris Young New Ford Edges sit on a production line at a plant in Oakville, Ont., in a Feb. 26, 2015, file photo.

WASHINGTON—NAFTA has helped fuel the comeback of the big American automakers, and those three companies are “very concerned” that the renegotiation will collapse because of President Donald Trump’s “extreme” demands, a representative said Thursday.

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U . S . automakers warn Trump ’ s ‘ extreme ’ demands threaten NAFTA talks , say deal fuelled their comeback . A new document from the American side illustrated those big gaps. The U . S . released an updated version of a July document published before negotiations started

Tariffs are Trump ' s latest negotiating tactic to make Mexico and Canada accept his demands on NAFTA , the three-nation trade deal . Economists say the most likely outcome is that talks get kicked down the road to 2019, but they don't rule out a U . S . withdrawal, which Trump threatens to do.

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Matt Blunt, president of the American Automotive Policy Council, which represents the policy interests of General Motors, Ford and Fiat Chrysler, said the North American Free Trade Agreement has been important to the companies’ transition from dire straits to booming sales.

Killing the deal would impose a $10 billion (U.S.) dollar tariff cost on them, he said, “equal to, essentially, the capital investment we’re making on an annual basis.” He did not detail how he arrived the figure.

Blunt said he retains some optimism. But he made clear that the automakers believe the negotiations are going poorly because of Trump’s proposals — think there is a real risk Trump will follow through on his frequent threat to terminate NAFTA entirely.

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The auto industry is vehemently opposed to a Trump plan to require 50 per cent U . S . content in cars, saying it would likely cause automakers to do more of their manufacturing outside the NAFTA zone.

Lawmakers as well as agricultural and industrial groups have warned Trump not to quit NAFTA , but he said that may be the outcome. On Monday, automakers from Detroit and around the world urged the Trump administration not to quit NAFTA and to back away from some of its demands in the

“Given the U.S. demands, and the Mexican and Canadian response, we’re very concerned that the negotiations could break down, collapse. We think other people ought to be concerned about that. Because the ramifications for not having a NAFTA are severe,” he said at a Washington International Trade Association panel discussion.

The U.S. auto industry is vehemently opposed to the Trump auto proposal that Canada and Mexico consider a non-starter. Though the U.S. government usually enters trade negotiations bearing auto proposals that are favoured by the powerful domestic industry, the Trump administration has so far dismissed the industry outcry and pursued the protectionist agenda on which the president campaigned.

Trump’s team has proposed that a car should not qualify for tariff-free treatment unless 50 per cent of it is made in the U.S. itself — there is no U.S. content requirement at all in the current agreement — and that the requirement for North American content be raised from 62.5 per cent to 85 per cent.

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South Lawn before their meeting about the North American Free Trade Agreement ( NAFTA ) at the Some downcast participants said the demands , unveiled this week in line with Trump ’ s “America First” At the very least, they could make it impossible to reach a deal renewing the treaty before a

The Trump administration has toughened one of its most contentious demands in the renegotiation The United States still wants a deal by the end of the month, threatening to hit Canada and Mexico The centrepiece of the talks is a U . S . demand to increase the amount of NAFTA zone content that

Blunt, former Republican governor of Missouri, called this “an extreme proposal” and “totally counter to the objectives of the Trump administration.” As independent industry experts have explained, Blunt said it would likely cause automakers to do more of their manufacturing outside the NAFTA zone rather than prompt them to hire more U.S. workers — simply paying the tariff rather than eating the larger cost of complying with the requirement.

“The business decision here is not very difficult,” he said.

Blunt’s words add to the gloom surrounding the state of the negotiations as the fifth round of talks approaches. The fourth round ended in public acrimony between Canada and the U.S., with Foreign Affairs Minister Chrystia Freeland accusing the U.S. of trying to undermine the agreement and U.S. Trade Representative Robert Lighthizer calling Canada and Mexico overly resistant to change.

Lighthizer also railed against trade deficits, one of Trump’s main focuses even though economists say they are a poor way to measure the health of a trading relationship. Blunt predicted that killing NAFTA would actually cause U.S. trade deficits to increase.

More work needed on TPP, Trudeau says

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On Friday Trump threatened to impose a 20 percent tariff on all imports of EU-assembled cars. The Association of Global Automakers rejected that contention, saying its members' American workers "are no less patriotic or willing to serve their country in a time of crisis than any other Americans ."

President Donald Trump says he wants to save the U . S . auto industry by slapping tariffs as high as 25 percent on foreign-made cars, but there’ s a problem: Automakers don’t want his help.

Kevin Dempsey, senior vice-president of the American Iron and Steel Institute, said the same, and he called NAFTA “a success” for the steel industry Trump campaigned on championing. Dennis Darby, chief executive of the Canadian Manufacturers and Exporters, said the death of NAFTA is “probably our worst nightmare.”

The fifth round is scheduled to officially begin next Friday, Nov. 17, in Mexico City, with some additional talks in the two days prior. .

Read more:

Another Trump poison pill for NAFTA? Ottawa slams demand for 50% U.S. content in cars

Top Trump official says U.S. isn’t offering ‘anything’ to Canada in exchange for NAFTA demands

Ted Cruz warns of ‘profound damage’ to U.S. economy if Trump kills NAFTA

If NAFTA dies ‘all hell will break loose’ .
No one should be surprised if Trump declares in a 5 a.m. tweet that he’s pulling the U.S. out of NAFTA—and nothing about what comes next is straightforwardIt’s a threat the President has repeated on multiple occasions, having at various times called NAFTA the “worst trade deal in the history of the world” and “the greatest disaster trade deal in the history of the world” and all terrible points in between.

Source: http://ca.pressfrom.com/news/money/-53198-u-s-automakers-warn-trump-s-extreme-demands-threaten-nafta-talks-say-deal-fuelled-their-comeback/

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