Leaders of Canada, Mexico, and the USA signed a new NAFTA agreement
Leaders of Canada, Mexico and the USA signed a new NAFTA agreement at the G20 summit in Argentina. The agreement still needs to be ratified by the governments of all three countries but it is a powerful first step. A key provision requires that 75% (up from 62.5%) of automotive parts are made in the region to qualify for tariff free treatment, and that workers are paid $16 hour (down from $22) on 40-45% of the vehicle. This move is intended to boost North American auto production and stop plants from moving to Mexico. It also means Canada escapes the national security tariffs on automotive imports that President Trump was threatening.
How does this impact steel tariffs? In June, when the US imposed tariffs on steel and aluminum imports from Canada, Mexico, and Europe, they said it was tied to lack of progress on NAFTA. This new NAFTA deal opens the door to resolving the tariffs, which Trudeau says is a priority for both governments.