
Trump has delivered on yet another campaign pledge and put a bullet through the head of NAFTA this morning. The new agreement, once approved by Congress, will be called the "United States-Mexico Trade Agreement" and will involve the United States and Mexico. It will take effect within 90 days. Canada can join at a later time if it chooses.
Among the highlights:
1. To qualify for tariff exemptions, 75% of all new auto production in the U.S. and Mexico must be done from parts produced in the U.S. and Mexico
WIN FOR MEXICO: This will shift some auto parts manufacturing from China to Mexico.
WIN FOR USA: Another knife in the throat of China.
2. To qualify for tariff exemptions, 40% of all new auto production in the U.S. and Mexico must be done by workers earning at least $16/hour
WIN FOR MEXICO: Workers at existing production facilities in Mexico may see pay raises.
WIN FOR USA: Future auto production facilities will be placed in the United States.
3. The deal expires after 16 years unless renewed
WIN FOR MEXICO: Mexico is not chained to an agreement if conditions on the ground change
WIN FOR USA: The USA is not chained to an agreement if conditions on the ground change