NAFTA Update: Steel Tariffs Remain
October 2, 2018—U.S. and Canada made an agreement on The North American Free Trade Agreement on Sunday night.
The new agreement must be ratified by Congress in 2019. And with the House of Representatives widely expected to shift from Republican to Democrat, the final details of the agreement announced Monday could be amended, according to a Forbes report.
The deal does not address steel and aluminum but covers a "mostly" status-quo policy for automakers and auto-parts companies who manufacture in Canada and Mexico.
According to Forbes, the U.S. still has to cut a deal with the European Union over trade policy that will impact German auto manufacturers exporting vehicles to the U.S., though they also build most of the vehicles they sell in the U.S. in North America.
The trade pact proposal exempts up to 2.6 million vehicles imported from each Canada and Mexico from tariffs, protecting current production. Auto parts shipments would also be exempted up to a certain limit for both countries, but raise the level of parts required in vehicles sold in the U.S. that are made in plants where they pay at least $16.00 per hour. That is meant to either shift jobs out of Mexico where wages are lower, or pay Mexican worker more.