One of the Trump regime's most preposterous demands that has emerged from trade talks with Mexico and Canada is a demand that 85 percent of all material used in the production of cars and trucks, including electronics, be sourced to North American producers. Moreover, Trump's trade representatives want to secure at least 50 percent of all production exclusively for the United States.
Ridiculous, right? Arrogant is another word. We don't even have that kind of manufacturing capacity here. We don't make electronics.
A group of 70 congressmen, including Republican congressmen, have signed a letter asking the Trump regime to drop their reckless demands because it will hurt their local economies.
The House members include many from auto-producing states such as Representative Mark Sanford of South Carolina, Steve Cohen of Tennessee, Mike Bishop of Michigan and Terri Sewell of Alabama. In a letter seen by Reuters, they wrote that the push by U.S. negotiators “would eliminate the competitive advantages provided to the U.S. auto industry under the current NAFTA rules – or lead to rejection by Canada and Mexico and the end of the agreement.”
The letter added that “either outcome would adversely affect the U.S. auto industry - reducing sales, production, and exports and harming U.S. workers in the process.”
Industry experts who, unlike Trump's henchmen, actually know how these things work say the most likely outcome of raising content thresholds to such high numbers would be a dramatic increase in imports of cars assembled in Asia and primarily China. The reason for this is it would be cheaper and more efficient to simply pay a small tax to import more cars instead of reconfiguring the entire line of production here.
As this group of congressmen and women point out, some lines of production here in America could even shut down because they would no longer meet the higher content thresholds. Tens of thousands of jobs could be lost in the process.
I don't know how this will end, but my gut says Trump will announce that he's abandoning NAFTA and force Congress to reauthorize it.