AUTO INDUSTRY/CANADA/MEXICO/TARIFFS/TRADE DEALS/TRUMP AS PRESIDENT: “President Donald Trump’s new North American trade deal could lead to some increased investment in the U.S., as he promised — but it will come at a price to consumers. The newly struck three-way agreement includes numerous strict new rules requiring auto manufacturers to source a significant portion of their cars from within North America if they want to be able to sell to consumers in the region without paying tariffs. It also leaves open the possibility that Trump could blow up the status quo by increasing auto tariffs beyond their current level. The result is that automakers are left with a choice: They can either build cars in the three countries to avoid the penalties, or keep their facilities elsewhere and face a risk of paying tariffs that Trump could ratchet up at any time. By design, the United States-Canada-Mexico Agreement has taken the flexibility out of investment decisions being made based on market conditions rather than dictates in a trade pact. It also runs counter to manufacturing trends because the auto industry has grown to rely on increasingly complex international supply chains.”
–Megan Cassella and Adam Behsudi, “Sticker shock: Trump’s new trade deal could bring higher car prices,” Politico, October 9, 2018 9:34 am