The car you drive might come from Detroit. But the rearview mirror could be a product of China. The speaker could be Japanese. The dashboard camera? Potentially Korean.
The Trump administration is arguing that the international anatomy of our vehicles is killing American jobs. The country’s auto suppliers, however, dispute that point, stressing that curbing access to foreign materials could actually hurt factory workers.
The debate is expected to heat up this week in Ottawa, where the president’s team is meeting Canadian and Mexican leaders for a third round of trade talks. The United States appears to be preparing to demand that duty-free goods under the North American Free Trade Agreement be made with more domestic parts.
” We cannot forget that the point of a free-trade agreement is to advantage those within the agreement – not to help outsiders,” Commerce Secretary Wilbur Ross wrote in a column Friday for The Washington Post. “Instead, NAFTA has provided entry into a bigger market for outside countries, and the United States is paying the price.”
As of today, NAFTA-approved products must be made with at least 60 percent North American materials. For cars, the share is 62.5 percent.
President Trump wants to raise those thresholds, though the administration has not introduced a target number. Ross and U.S. Trade Representative Robert E. Lighthizer have also said they want to increase the minimum requirements of American-made content, the commerce secretary wrote, “especially in autos and auto parts.”
Ross pointed to a Commerce department report released Friday that found that the U.S.-made content of Canadian imports fell to 15 percent in 2011 from 21 percent in 1995, the year after NAFTA went into effect.
The share of American-made parts in products imported from Mexico, meanwhile, dropped to 16 percent from 26 percent.
This shift suggests that products from other foreign markets have flooded the…