Detroit – The National Automobile Dealers Association on Tuesday provided support beyond the proposed trade deal between Canada, Mexico and the United States.
Charlie Gilchrist, president of the organization representing approximately 16,500 new vehicle dealers in the United States, called on Congress to “quickly” adopt the United States-Mexico-Canada trade agreement to replace the Free Trade Agreement North American.
As the auto industry faces the threat of tariff increases, the deal would offer some protection to trade with the country’s neighbors and help keep US industry competitive, he said. .
“The United States-Mexico-Canada deal – better known as the USMCA – that the president negotiated will maintain automotive production and distribution in North America,” Gilchrist told the Automotive Press Association on Tuesday. Detroit Athletic Club. “This will preserve the global competitiveness of the US auto industry. And it will allow dealerships to continue to provide affordable vehicle options to US consumers.”
Tariffs have already created disruption in the auto industry – with slowing sales, range, electrification and now a 23-day United Auto Workers nationwide strike against General Motors Co. Motor Co. and GM said that aluminum and steel tariffs increased their raw material costs by $ 1 billion in 2018.
And now the Trump administration is threatening 25% levies on vehicles and auto parts in the name of national security. A decision is expected next month.
Such widespread obligations “would wreak havoc in our industry,” said Gilchrist. A 25% tariff on all imported cars, trucks and parts would result in the loss of 117,000 of the 1.1 million jobs at franchised dealers, or about seven jobs per dealership, according to the Center for Automotive Research. Ann Arbor.
Still, Gilchrist maintained that he believed that “the president fully understands the American auto industry” and is using the threat as a negotiating tool, especially with China.
Gilchrist pointed out the global nature of auto manufacturing and how the USMCA would provide the stability that automakers are currently looking for. Legislation to implement the accord of President Donald Trump, who is involved in an impeachment inquiry in the United States House, is being negotiated in Congress. Still, House Speaker Nancy Pelosi, D-California, said last week: “We are on the road to yes.”
Gilchrist has said he hopes to see it passed by November: “We’re trying not to let it slip down the priority list.”
Canada and Mexico supply US auto manufacturing plants with over $ 58 billion worth of auto parts, 48% of auto parts bought in the US come from its neighbors, and 25% of all new vehicles sold here are from Canada and Mexico – more than a third of which were Detroit Three, he said. Meanwhile, the United States sends over 71% of its vehicle exports to Canada or Mexico.
The ongoing strike against GM underscores this global nature. Following the shutdown of production lines in the United States, GM has laid off more than 10,000 non-UAW employees in Mexico, Ohio and Ontario.
The USMCA would increase to 75%, from 62.5%, the percentage of parts in a car that must originate in the United States, Canada or Mexico to qualify for duty-free treatment. It also requires 40 to 45 percent of auto parts to be made by workers earning at least $ 16 an hour by 2023.
Some union leaders, including AFL-CIO President Richard Trumka, criticized the deal for not doing enough to create shared prosperity for every worker.
A report released earlier this year by the United States’ International Trade Commission predicted that automakers would sell 140,000 fewer cars per year under the deal. Yet the auto industry backed him up.
âWe need to get that stability for our OEMs,â Gilchrist said. “And I think it will create jobs in the United States, which is why I think it’s a good deal.”