Executive Briefings

A Map Like This Persuaded Trump to Save Nafta - For Now

Location is everything in the real-estate biz, so it's not entirely surprising that a map changed former developer Donald Trump's mind.

A Map Like This Persuaded Trump to Save Nafta — For Now

President Trump was close to withdrawing from the North American Free Trade Agreement last month, before he saw a U.S. map highlighting areas that rely on business with partners Mexico and Canada. It just so happened many of those states supported Trump in the 2016 election, giving him a strong motivation to renegotiate rather than abandon the pact, he told the Washington Post.

The White House declined to provide a copy of the exact map presented to Trump, so we came up with our own version.A quick look at export data from 2016 shows manufacturing and border states that voted Republican in the November election depend heavily on trade with Nafta partners, both north and south of the U.S. borders. The five states with the largest percentage of exports to those countries supported Trump, including delegate-rich Michigan and Ohio, which backed his Democratic predecessor Barack Obama in 2012 and 2008.

Employment in those two states is highly linked to manufacturing, such as automobile assembly, which depends on the supply of parts that move freely and frequently between the three countries. Nafta’s demise and a potential trade spat on the continent would disrupt and possibly cripple that flow, and send manufacturers to seek cheaper supplies overseas, according to Joseph Parilla, a fellow at the Brookings Institution.

“If we diminish our competitiveness in a way that makes it more attractive for those supply chains to just fully up and leave North America, that could essentially be the death knell for American manufacturing,” he said.

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President Trump was close to withdrawing from the North American Free Trade Agreement last month, before he saw a U.S. map highlighting areas that rely on business with partners Mexico and Canada. It just so happened many of those states supported Trump in the 2016 election, giving him a strong motivation to renegotiate rather than abandon the pact, he told the Washington Post.

The White House declined to provide a copy of the exact map presented to Trump, so we came up with our own version.A quick look at export data from 2016 shows manufacturing and border states that voted Republican in the November election depend heavily on trade with Nafta partners, both north and south of the U.S. borders. The five states with the largest percentage of exports to those countries supported Trump, including delegate-rich Michigan and Ohio, which backed his Democratic predecessor Barack Obama in 2012 and 2008.

Employment in those two states is highly linked to manufacturing, such as automobile assembly, which depends on the supply of parts that move freely and frequently between the three countries. Nafta’s demise and a potential trade spat on the continent would disrupt and possibly cripple that flow, and send manufacturers to seek cheaper supplies overseas, according to Joseph Parilla, a fellow at the Brookings Institution.

“If we diminish our competitiveness in a way that makes it more attractive for those supply chains to just fully up and leave North America, that could essentially be the death knell for American manufacturing,” he said.

Read Full Article

A Map Like This Persuaded Trump to Save Nafta — For Now