Sup­pli­ers fear job losses if U.S. quits NAFTA

Nearly 50K could lose work if a 35% tar­iff is added, study says

The Detroit News - - Front Page - BY KEITH LAING Detroit News Wash­ing­ton Bu­reau

Wash­ing­ton — As many as 50,000 work­ers at auto parts sup­pli­ers could lose their jobs due to in­creased tar­iffs if the U.S. pulls out of the North Amer­i­can Free Trade Agree­ment, ac­cord­ing to a study re­leased Thurs­day by the Mo­tor and Equip­ment Man­u­fac- tur­ers As­so­ci­a­tion, which lob­bies for sup­pli­ers in Wash­ing­ton.

The study, re­leased as NAFTA ne­go­tia­tors from the U.S., Canada and Mex­ico meet in the Wash­ing­ton, D.C., sub­urbs, found that a 35 per­cent tar­iff that would be placed on auto parts that are made in the U.S. and shipped to Canada or Mex­ico with­out the trade agree­ment’s duty-free treat­ment would re­sult in a job loss of 25,000 to 50,000 in the parts sup­plier in­dus­try.

“Costs due to a 35 per­cent tar­iff could de­crease sup­plier con- tent from 65 to 61.5 per­cent, po­ten­tially im­pact­ing sup­plier vol­ume and thus man­u­fac­tur­ing jobs,” the group said. “Em­ploy­ees work­ing for sup­pli­ers with con­tent that is most likely to be re­moved are most at risk.”

The find­ing comes as NAFTA ne­go­ti­a­tions ap­pear to have hit sev­eral snags. Pres­i­dent Don­ald Trump has threat­ened re­cently to with­draw com­pletely from the deal, which was en­acted in 1994 to cre­ate a free-trade zone between the U.S., Mex­ico and Canada.

Trump, who tar­geted NAFTA fre­quently dur­ing his elec­tion cam­paign, said in an Forbes in­ter­view that was pub­lished Tues­day: “I hap­pen to think that NAFTA will have to be ter­mi­nated if we’re go­ing to make it good. Oth­er­wise, I be­lieve you can’t ne­go­ti­ate a good deal... .”

Asked about the pos­si­bil­ity of ne­go­ti­at­ing a sep­a­rate deal with Canada and Mex­ico if NAFTA falls apart af­ter meet­ing with Cana­dian Prime Min­is­ter Justin Dow Jones 22,841.01 | 31.88 Nas­daq 6,591.51 | 12.04 S&P 500 2,550.93 | 4.31 GM $44.89 Ford $12.12 | $0.26 FCAU $17.60 | $0.36

| $0.58

Trudeau at the White House on Wed­nes­day, Trump said: “We’ll see what hap­pens. We have a tough ne­go­ti­a­tion and it’s some­thing you will know in the not too dis­tant fu­ture be­cause we are go­ing to be dis­cussing NAFTA and we will be dis­cussing de­fense.”

Cur­rent NAFTA rules re­quire cars have at least 62.5 per­cent of their parts made in the U.S., Canada or Mex­ico. But some madein-Amer­ica hawks have pushed the Trump ad­min­is­tra­tion to ad­vo­cate for an in­crease in the re-

Evan Vucci / AP

Pres­i­dent Trump has threat­ened to com­pletely with­draw from deal.

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