The election of Mr. Trump as the President of the United States has created considerable uncertainty regarding the U.S. investment climate. Chief among these uncertainties is the status of the North American Free Trade Agreement (NAFTA), which President-Elect Trump repeatedly attacked for leading to the loss of U.S. manufacturing jobs. President-Elect Trump has vowed to renegotiate the Agreement and, if an acceptable renegotiation cannot be reached, to withdraw from NAFTA.
Many automotive companies have established multinational supply chains, relying on the free trade provisions of NAFTA, including its promise of a stable investment environment and no duties between Canada, Mexico, and the United States. With automotive companies essentially treating the three countries as a single, integrated supply chain, no industry has a greater stake in how President-Elect Trump implements his NAFTA campaign promises, or has more questions about the likely future of the country.
What’s Next?
In a new white paper, I explore the “top ten questions” that surround NAFTA in the new administration, providing practical advice regarding such topics as how a NAFTA withdrawal would work, the likelihood of a withdrawal actually occurring, what the scenarios are for duty changes under a NAFTA exit, and what steps companies can take to help anticipate and minimize the risk of a NAFTA exit. The answers to these and other NAFTA-related questions are found here.
