More Car Manufacturing Likely Coming to North America

The new trade deal for North America, which replaces NAFTA, is causing automakers from other parts of the world to seriously consider making even more cars here. This also comes in light of President Trump’s threats to levy even stiffer tariffs against cars made in Asia and Europe that are brought stateside.

A recent report from The Wall Street Journal cites quite a few foreign automakers that are weighing producing more cars in Canada, the United States, and Mexico, like BMW and Daimler. These automakers already have factories on this continent and use parts made here, but the volume could turn up significantly.

As part of the new United States-Mexico-Canada Agreement (USMCA), which hasn’t been approved by Congress yet, at least 75 percent of a car’s value has to be built in North America or a duty will be charged. That would make shipping in engines made elsewhere too costly.

The whole point of USMCA, something many Democrats are actually quite excited about, is to generate jobs in the region that have steadily flowed out for decades. According to The Wall Street Journal report, foreign car brands made 56 percent of their light-vehicles sold here in the U.S. Sourcing parts made overseas is still extremely common, especially with expensive engines and transmissions. This new trade agreement could cause a huge shift in how cars are made around the globe.