On Friday, President Donald J. Trump signed a three-way trade deal between the U.S., Mexico and Canada (USMCA) that will replace NAFTA if it is approved by Congress.

“This is a model agreement that changes the trade landscape forever, and this is an agreement that first and foremost benefits working people, something of great importance to all three of us here today,” the President said.

Various industry associations commented on the news. The Motor & Equipment Manufacturers Association (MEMA) issued a statement saying it is pleased the three parties have signed the new agreement yet it believes negotiations should address the Section 232 tariffs, which will deeply impact the industry both from a manufacturing standpoint and employment levels.

“MEMA believes that the signature by the parties of the USMCA is a positive step forward for all three countries,” said in its official statement last week. “The success of our industry and the continued employment of hundreds of thousands of American depends on a strong, functioning North American supply chain. MEMA congratulates all the parties in reaching this important juncture.

“Yet, in order for USMCA to achieve success, the parties must conclude negotiations to exempt Mexican and Canadian imports from Section 232 tariffs on steel and aluminum,” MEMA continued. “These tariffs are currently costing our industry hundreds of millions of dollars, negating any opportunity to invest in more U.S. manufacturing capacity or workforce development. USMCA will not create the desired opportunities for the United States without addressing steel and aluminum tariffs.”

Gov. Matt Blunt, president of the American Automotive Policy Council, issued a similar statement, mirroring MEMA’s concerns.

“We appreciate the administration’s continued efforts to modernize our nation’s existing trade agreements and help grow U.S. automotive manufacturing with new agreements like the USMCA,” said Blunt. “We commend the negotiators for crafting an agreement that keeps the United States and North American automotive manufacturing competitive and for including important provisions that require the acceptance of vehicles built to U.S. safety standards and address currency manipulation. However, we remain concerned that the continued imposition of steel and aluminum tariffs on Canada and Mexico will undermine the benefits of the USMCA. We strongly encourage the parties to come to a resolution and relieve the undue burden that has been placed on U.S. manufacturers.”

The American Automotive Policy Council (AAPC) is a Washington, D.C. association that represents the common public policy interests of its member companies FCA US LLC, Ford Motor Co. and General Motors Co.

To help suppliers better understand the USMCA, MEMA and OESA will host an informational briefing for members on the agreement on Wednesday, Dec. 12, at Laurel Manor in Livonia, Michigan. Subject matter experts from MEMA, Arent Fox and EY who have been involved in USMCA negotiations and review meetings will present timely and important information of direct interest to suppliers.

For more information, click here.