Auto steel rules said to slow USMCA

Negotiators hustle to meet deadlines to seal revised NAFTA deal.

The rules governing the use of steel and aluminum in cars have emerged as the latest obstacle to completing a revised NAFTA deal among the U.S., Mexico and Canada in time for congressional approval by year end.

The three nations are discussing the fine print of the agreement that requires 70% of steel and aluminum in vehicles to come from the continent in order to receive duty-free treatment, according to a half dozen people familiar with the talks, who asked not to be named because they’re private. Mexico and the U.S. administration were seeking to agree on changes to the text as early as Friday before presenting a proposal to House Democrats.

Last week the U.S. put on the table a demand to count only steel and aluminum slab toward the 70% threshold that originate in North America, the people said. That would complicate qualification for cars produced in Mexico, whose slabs often originate in Brazil, Japan and Germany.

On Monday, President Donald Trump announced plans to reinstate tariffs on steel and aluminum from Brazil and Argentina, nations he accused of devaluing their currencies to the detriment of U.S farmers.

Rules for cars are at the heart of Trump’s bid to replace the North American Free Trade Agreement with the so-called U.S.-Mexico-Canada Agreement, or USMCA, that gives more incentive to manufacture in the U.S.

They were among the most difficult and painstaking issues to resolve in the negotiations last year.