U.S. and Mexico Resume Trade Talks as Canada Faces New Tariffs
The United States and Mexico have returned to trade talks. There are parts of the USMCA agreement that both countries would like to rewrite. It’s the first sign of true discussion since the US squandered an opportunity earlier this month to renew the accord.
Canada is missing from these talks, which is a big deal since the three countries usually negotiate together.
US and Mexican trade commerce officials meet in Mexico City for three days. This round started after President Trump launched a formal review of the USMCA July 1. This review is the beginning of a 10 year clock. If the countries cannot agree on a new deal, the pact could eventually expire.
Why Manufacturing Jobs Are the Big Topic
The U.S. wants more factories on American Ground. That remains to be the primary concern of these discussions.
Car manufacturing is a top priority, says U.S. Trade Rep. Jamieson Greer. He cited General Motors and Toyota for both of which are spending more in the U.S.
The figures provide the answer to why this is important. Last year, the US deficit with Mexico reached $197 billion, 17% higher than the year before.
The US is also pushing for more stringent regulations on North American-made vehicles. It is proposed that half the value of each motor vehicle be made from American made parts. It would challenge the entire car industry’s supply chains.
Mexico hopes to finish these talks by the end of the year. Officials are concerned that stretching this will scare investors.
Canada Faces Fresh Tariffs
While Mexico speaks, Canada faces pressure. The US just placed new tariffs on almost $20 billion worth of Canadian products. Washington says this responds to Canadian tariffs on US cars, steel, aluminum, and dairy.
But, there’s more to this story. The US demands tougher regulations to prevent China having a backdoor into the North American market through Mexico or Canada.
The stakes are massive. Every year, USMCA contributes to $1.6 trillion of trade. Such adjustments will influence factories, jobs and prices throughout North America for years to come.
