U.S. automakers are facing tough choices posed by United States-Mexico-Canada Agreement (USMCA) to avoid its pressure on costs being reflected in showroom price increases.
Jennifer Safavian, president and CEO of Autos Drive America, which represents the U.S. operations of international automakers, admits the USMCA is “still a work in progress.” She adds: “There are a lot more requirements and rules. For the auto industry it is a much heavier lift” than for some other industries covered by the USMCA.
Autos Drive America’s executive vice president, Paul Ryan, says companies already have submitted ‘alternative staging regime’ petitions to the office of the U.S. Trade Representative, requesting more time to comply with the USMCA’s origin requirement. “This is an order of magnitude more complex” than NAFTA, he says.
Yet, Ryan is optimistic the USMCA’s push for more supplies to be sourced within the three signatory countries will actually deliver, with automakers recognizing “an integrated North American automotive market has been key to the expansion of international automakers’ operations in the United States.”