The United States-Mexico-Canada Agreement contains the most complex automotive rules of origin of any trade deal, significantly raising rule requirements for the industry and steeply increasing costs for compliance programs, several experts said at an April 4 Center for Strategic and International Studies panel. Several industry leaders said the USMCA will force many companies in the automotive supply chain to make substantial changes. “The USMCA rule of origin is now by far the most complex, stringent requirement that exists in any free trade agreement in the world,” said Matt Blunt, president of the American Automotive Policy Council. “It really will force manufacturers to think more about the rule of origin and their sourcing decisions than they’ve ever done before.”
President Donald Trump denied he said Mexico has a year to improve drug interdiction (see 1904040030), but, for the second day in a row, he suggested Mexico is improving its control of migration, so he won't need to close the border soon. "I don't think we'll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico at 25 percent will be massive," Trump told White House reporters a few hours after he made the one-year remark, on April 4.
President Donald Trump’s threats to close the southern border to force Congress to pass comprehensive immigration legislation have multiple trade groups warning of dire economic consequences if the administration follows through. The mere threat of a border shutdown is causing “uncertainty” in U.S. retail supply chains, the National Retail Federation said.
Canada's top diplomat in Detroit, Consul General Joe Comartin, said the Canadians used to get assurances, whether from politicians or the Office of the U.S. Trade Representative, that the tariffs on its steel and aluminum exports were going to come off soon. "We're not even getting those assurances anymore," he told International Trade Today March 27 in an interview. "We're just not seeing any movement on this side on the tariffs."
For months, Democrats have said that the 10-year biologics exclusivity period in the new NAFTA is a reason to reject it. A few days ago, House Ways and Means Trade Subcommittee Chairman Rep. Earl Blumenauer, D-Ore., said it is one of the reasons he doesn't want to advance the treaty (see 1903250061). The U.S. gives biologic drug developers 12 years of data exclusivity, and the new NAFTA requires that all three countries provide 10 years of exclusivity. Currently, Canada provides eight years, and Mexico, five. During negotiations, two California Democrats, along with two Republicans, urged the U.S. trade representative to convince Canada and Mexico to grant 12 years' exclusivity, to preserve the U.S. biologic drug industry's economic position.
The U.S. should keep in place the Section 232 tariffs on aluminum and steel from both Mexico and Canada even if it impedes movement on the U.S.-Mexico-Canada Agreement, the American Line Pipe Producers Association said in a news release. The group, a coalition of large-diameter welded pipe (LDWP) producers, took issue with recent United Steelworkers calls for the removal of the tariffs before any USMCA ratification (see 1903250035). "While ALPPA supports the USMCA, it strongly rejects that USMCA should be tied to removal of Section 232 tariffs, particularly given the trade-distortive practices of Canada and Mexico," the group said.
Cummins CEO Tom Linebarger, who chairs the Business Roundtable Trade and International Committee, released a statement on the U.S.-Mexico-Canada Agreement after the Business Roundtable hosted President Donald Trump at its quarterly board meeting on March 21. “The CEO members of Business Roundtable, who lead companies with more than 15 million employees, strongly support congressional passage of USMCA implementing legislation this year. We stand united to preserve and modernize North American trade, which supports over 12 million jobs and a strong U.S. economy," he said. The Business Roundtable will work to build the necessary support to pass that bill, he added.
Rep. Bill Pascrell, D-N.J., who was ranking member on the House Ways and Means Trade Subcommittee, and Rep. Rosa DeLauro, D-Conn., a prominent NAFTA foe, are soliciting signatures for a letter they plan to send later this month on the importance of including Mexican labor reforms in a new NAFTA, now called the U.S.-Canada-Mexico Agreement.
Rep. Jackie Walorski, R-Ind., said that with an approval rate of just under 6 percent for steel exclusion requests when domestic firms objected, "it really looks like somebody's finger is on the scale." In a sit-down with International Trade Today, Walorski explained how what started with complaints from 10 businesses in her district -- which is heavy with steel-consuming RV manufacturers -- has made her office the place for companies around the country to share their problems with exclusions. "We knew this is probably what was going to happen," she said of the exclusion process that favors domestic producers.
While U.S. textile manufacturers and apparel industries “have expressed overall support” for the U.S.-Mexico-Canada Agreement, the two sectors disagree on several key provisions, including certain rules of origin and enforcement procedures, according to a March 5 report by the Congressional Research Service.