What’s in the USMCA deal?
The most significant difference between Nafta and the USMCA may be as simple as the rebranding exercise itself, which some observers said would hand Trump political capital, regardless of its substance.
Beyond that, there are meaningful changes for the car industry. From 2020, cars must have 75% of their parts manufactured in Canada, Mexico or the US to qualify for zero import tariffs – a big jump from the current 62.5% requirement.
At least 40% of a car made in North America must also be made by a worker earning at least $16 an hour, which is likely to benefit the US and Canada most.
Another element of the deal will exempt Mexican and Canadian cars from any future US automotive tariffs up to certain import quotas.
Elsewhere, US farmers will get greater access to Canada’s dairy market through an increased quota on foreign imports.
Canada has long held high tariffs on most dairy products, leading to higher prices than in the US, while Trump has argued that the US industry should be able to sell more products to its northern neighbour.
One surprise area where there has been no change is that US tariffs on Canadian and Mexican steel and aluminium will remain for now, even though this was seen as a key barrier to a deal.