US Trade Representative (USTR) officials warned that the ruling on the recent U.S.–Mexico–Canada Agreement (USMCA) may put US auto jobs at risk.
After the United States lost its challenge against Canada and Mexico, USTR officials released an official statement, warning the US of the possible risks the ruling could pose to the American jobs in the auto industries and other supporting industries.
The warning came after the US lost its challenge this week, under the USMCA rules that would prevent Mexico and Canada interpretation of the trade agreement’s content rules which would allow more auto parts derived from countries outside of North America to come in.
According to the reports, more than 50% or at least 75% of a vehicle’s parts must derive from North America in order to secure tariff-free status under USMCA.
In an exclusive report released by Breitbart on the said battle, both Mexico and Canada specifically “argued that USMCA rules should be interpreted to mean that if a core part of a vehicle has 75 percent regional content, then the percentage can be rounded up to 100 percent when weighing the entire vehicle’s regional content.”
“The U.S. argued that the 75 percent regional content requirement for core parts should not automatically allow automakers to round up the percentage for a vehicle’s regional content,” the report added.
However, the result was in favor of Mexico and Canada.
Following the decision, USTR spokesman Adam Hodge released a statement in an exclusive interview with Reuters, claiming that it is “disappointing” and may result in “fewer American jobs.” He also added that the United States may also face retaliatory tariffs if officials would not comply with the ruling.
Furthermore, representatives with the United Auto Workers (UAW) who represented majority of the country’s auto workforce argued that the ruling would spew distrust in trade agreements among working and middle class Americans.
“We are deeply disappointed by the USMCA panel’s unfortunate decision which would, as a practical matter, allow automakers to reduce the amount of North American content needed to meet the auto rules of origin standard found in USMCA,” the representatives claimed.
“The roll-up provisions that automakers fought for are harmful to our members and undermines USMCA’s goal of bolstering the U.S. auto industry. In short, 70% should mean 70% — not 100%. Time and time again workers have been given empty promises, and this is a vital matter that directly affects jobs for workers here in the U.S. Undercutting the integrity of the rules degrades the confidence working people have in trade agreements,” they added.
