After the recently negotiated USMCA trade deal, foreign auto companies are considering bringing more of their parts manufacturing to North America. Chester Dawson and William Boston report in The Wall Street Journal:
Foreign car makers are considering moving more manufacturing to North America from their overseas plants following the recent U.S. trade deal with Canada and Mexico.
Within days of the U.S. and Canada reaching a pact to replace the roughly 25-year-old North American Free Trade Agreement, executives at several foreign car makers said they are considering changes to their supply chains that would shift more auto-parts manufacturing work to the U.S., Canada and Mexico.
“We will allocate more U.S. production for the U.S. market,” BMW AG CEO Harald Krüger told reporters at the Paris Motor Show this week. He said that the German car maker already sources many parts in the region, but the new trade pact will accelerate a shift in investment.
Daimler AG CEO Dieter Zetsche said at the same event the new agreement could force it to shift more engine manufacturing to the U.S., where it builds cars and sport-utility vehicles at a factory in Tuscaloosa, Ala.
The impact on foreign auto makers’ North American operations from the new United States-Mexico-Canada Agreement, which still has to be approved by Congress, remains unclear. But many in the auto industry see the pact as evidence of President Trump’s tough approach to trade at a time when he is threatening new tariffs on European and Japanese auto imports.
Read more here.
Jeremy Jones, CFA
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