Trump says Canada, Mexico 'very hard to deal with' in NAFTA talks

Donald Trump

Donald Trump Mexico and Canada ‘Very Spoiled’ with NAFTA AP

In laying out the rationale for investigating whether vehicle tariffs are warranted, Commerce Secretary Wilbur Ross suggested that auto imports have damaged the USA vehicle industry.

The trade dispute took on added complexity this week when U.S. President Donald Trump announced a national security investigation into imports of cars and trucks, a probe that could lead to tariffs against China as well as key U.S. allies such as Canada, Mexico, Japan and Germany.

As for Trump's comments, Easter said he would not comment on a "one off" statement by the president.

"There is evidence suggesting that, for decades, imports from overseas have eroded our domestic auto industry", Ross said in a statement. The United States is turning to the same law it used to hit steel and aluminum imports - Section 232 of the Trade Expansion Act of 1962 - to delve into the necessity of cars, trucks and auto parts.

Japan's minister of Economy, Trade and Industry, Hiroshige Seko, said Japan, which accounts for about 40 per cent of US vehicle imports, will continue to remind USA officials that any trade measures must conform to the rules of the World Trade Organization.

If investigators can prove that foreign vehicle makers are harming the prospects of United States auto makers, it could provide the legal basis to impose tariffs on vehicle imports.

A USA warning that it may introduce tariffs on foreign auto imports hit shares in German carmakers BMW, Daimler and Volkswagen on Thursday, which together have a more than 90 percent share of North America's premium vehicle market.

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The U.S. remains far apart on the talks over rewriting the trade pact with Canada and Mexico, with the discussions at an impasse over rules for vehicle production. Canada has been very hard to deal with ... but I will tell you that in the end we win.

Earlier Wednesday, Trump, who has repeatedly pledged to revive American manufacturing, said that "big news" was coming that would be welcomed by US auto workers but he gave no details. Formal re-negotiations between Canada, Mexico and the United States have been ongoing since last summer.

After many decades of losing your jobs to other countries, you have waited long enough", Trump tweeted in the hours before the announcement, which came amid reports that North American Free Trade Agreement talks between Mexico, Canada, and the US have stalled over auto manufacturing rules.

"China and Germany are on the path of promoting multilateralism and bolstering free trade", Merkel said in Beijing.

"Increasingly frustrated by stalled NAFTA talks, President Trump's attempt to raise auto tariffs may be tactic to drive Canada and Mexico (especially the latter) to compromises", Valliere said. Nonetheless, the Trump administration has set its own precedent in widening the definition of national security to include economic security and could use that as a legal basis to justify its moves. "After many decades of losing your jobs to other countries, you have waited long enough!" he tweeted in the morning. The U.S. has been demanding that a percentage of a car's content of auto parts originate in a country - the U.S. or Canada - with average auto worker wages of about $15 an hour to qualify for NAFTA's duty-free status.

"If these reports are true, it's a bad day for American consumers", John Bozzella, CEO of Global Automakers, said in a statement.

"They make it impossible for our cars (and more) to sell there". At the same time, the United States exported almost 2 million vehicles worldwide worth $57 billion.

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