When Donald Trump took office and took aim at the North American Free Trade Agreement (NAFTA) as promised on the campaign trail, critics – with good reason – sounded alarm at his in-your-face approach. It’s not, they said, how you deal with neighbors.
Fair enough. But at the end of the day, the United States, Mexico and Canada have hammered out a new and improved trade agreement critical to the economic infrastructure of North America. In fact, the United States-Mexico-Canada Agreement – USMCA, as it’s known – is so important it’s almost unthinkable a Democrat majority in Congress could kill it for no reason other than it was negotiated by the Trump administration.
There is a lot to like about the agreement. It changes “rules of origin” for automobiles manufactured in Mexico and exported to the U.S., raising the requirement for American-made parts from 62.5% to 75%. And it raises the minimum wage Mexican auto workers must be paid. The U.S. International Trade Commission estimates the USMCA would result in $28 billion in new U.S. auto part purchases and create 76,000 U.S. auto jobs.