Car industry bracing for impact from Trump’s anti-free trade vows

Global Business

Car industry bracing for impact from Trump's anti-free trade vows

U.S. President-Elect Donald Trump has called the North American Free Trade Agreement, or NAFTA, a “disaster”, promising to change it on his first day in office.

He said the trade agreement, created by former President Bill Clinton in 1993, has moved jobs to other countries, and it’s time to bring those jobs back home.

But some question whether his plans for the auto industry could potentially do more harm than good.

CGTN’s Nick Harper reports.

Car industry bracing for impact from Trump's anti-free trade vows

Car industry bracing for impact from Trump's anti-free trade vows

U.S. President-Elect Donald Trump has called the North American Free Trade Agreement, or NAFTA, a “disaster”, promising to change it on his first day in office. He said the trade agreement, created by former President Bill Clinton in 1993, has moved jobs to other countries, and it’s time to bring those jobs back home. But some question whether his plans for the auto industry could potentially do more harm than good. CGTN’s Nick Harper reports.

Donald Trump argues NAFTA has wiped out U.S. manufacturing jobs. Unionists said Canada and Mexico have benefited at the expense of cities like Detroit. They applaud Trump’s plans.

Lured by cheaper production costs, nine carmakers have invested in Mexico since 2010. Including Detroit’s big three, Ford, Fiat Chrysler, and General Motors.

They remain headquartered in Detroit with one of them just across the border from Canada.

It’s less than half a mile, but geographically that’s a very significant difference. For Donald Trump, General Motors being on the U.S. side of the river is a win for American jobs. And that applies to where car companies choose to locate their factories and build their cars.

Trump has threatened a 35 percent trade tariff on cars made overseas and sold in America.

But as it’s more expensive to produce cars in the U.S. That means higher costs for car makers-costs they’re likely to pass on.

The Center for Automotive Research in the U.S. state of Michigan argues Trump’s proposed trade tariff, combined with a withdrawal from NAFTA, could cost the U.S. another 31,000 jobs.

Detroit is no longer the auto industry powerhouse it once was. Jobs moving overseas have clearly hurt the city.

But automakers and economists both question whether Donald Trump’s plans will provide that promised roadmap for recovery.