Ford Authority

President Trump Signs USMCA Into Law Replacing NAFTA

We mentioned a couple of weeks ago that the United States Senate had approved President Trump’s USMCA, United States-Mexico-Canada Agreement, and sent the legislation on to the president’s desk for his signature to become law. President Trump has now signed the USMCA into law and, with his signature, delivered some trade certainty to automakers in the United States.

USMCA requires automakers to produce cars with 75 percent of the parts content originating from the United States, Canada, or Mexico to qualify for duty-free treatment. That requirement is known as “rules of origin” and represents an increase from the 62.5 percent parts content that was required to be from the United States, Canada, or Mexico under NAFTA.

USMCA also requires 40 to 45 percent of a vehicle’s content to be made by workers earning at least $16 per hour with vehicles not meeting that number subject to a 2.5 percent duty. The goal of that requirement was to lure automakers to bring more of their production back to the United States from Mexico, where pay scales are much lower. President Trump said at the signing ceremony that we were “finally ending the NAFTA nightmare.”

President Trump also noted that the USMCA was estimated to add another 1.2 percent to the United States GDP and create “countless new American jobs.” The Trump administration is hopeful that with the USMCA in place and a recent trade deal with China, the economy of the United States will continue to grow. Ford’s Joe Hinrichs, President of Automotive, was in attendance at the signing ceremony, as was GM CEO Mary Barra. Hinrichs said that the new deal will “crackdown” on currency manipulation and supports U.S. manufacturing while ensuring that the U.S. auto industry remains globally competitive.

Mexico has stated that 30 percent of its current auto production won’t conform to the new rules. Some analysts expect models made Mexico with low domestic sales volume in the United States or that are too expensive to bring in compliance will be withdrawn from the market. The vast majority of U.S. and Canadian production is expected to conform to the new rules within a 3 to 5 year transition period.

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Source: The Detroit News

Shane is a car guy with a fondness for Mustangs and off-roading.

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  1. John Bolton

    Well that’s got to be the most hilarious and fitting typo i’ve ever seen lmao

    1. Fx4man

      … if you think it was a typo, you’re more ignorant than your fake profile name …

  2. Doug

    Well I think it’s not hilarious and not fitting. No President of the United States should be maligned in any magazine in such a way. Only true liberals think that way…if it fits their narrative, of course. The USMCA is an historic deal for the U.S. and should have been done decades ago.

    1. Shane McGlaun

      It wasn’t intentional and has been fixed.

      1. Scott

        … you really aren’t overly bright, are ya Einstein?

    2. Fx4man

      right on, Doug. Teaching these man-bunners is a lost cause.

  3. Ford Owner Is A Nitwit

    “but allows the foreign plants to build their vehicles in the U.S without unions..” Huh? The president has control over what companies have unions? Did you complain about this when B Hussein O was ripping off the middle class?


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