Executive Briefings

Taxes and NAFTA: Can Trump's Cure for American Manufacturing Bolster the Auto Industry?

President Trump is not a fan of recent trade deals. He condemned the Trans-Pacific Partnership (TPP) during the campaign and called the North American Free Trade Agreement (NAFTA) "the worst trade deal maybe ever signed anywhere."

Since being elected he has signaled a move toward more protectionist policies, suggesting at one point a border tax of 20 percent on imported goods. Those policies may affect the auto industry differently than in the past.

The U.S. auto industry is now intricately tied into a global web of factories, supply chains and international markets. This process started years before NAFTA and accelerated after the 2009 financial crisis.

“Today, you can walk into a dealership in the United States and buy a car that was built in Poland, Hungary, the Netherlands, Thailand, China and in several other countries,” said Bernard Swiecki, senior automotive analyst at the Center for Automotive Research (CAR), a nonprofit automotive research organization.

Or you can buy a Camry built in Kentucky.

Why the most ‘American’ car is a Toyota

The Toyota Camry supported more U.S. assembly-plant jobs in 2016 than any other car, based on sales, parts and place of final assembly. When including exports, the Honda Accord shot to the top, according to Cars.com, which uses various factors to rank the most American-made cars.

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Since being elected he has signaled a move toward more protectionist policies, suggesting at one point a border tax of 20 percent on imported goods. Those policies may affect the auto industry differently than in the past.

The U.S. auto industry is now intricately tied into a global web of factories, supply chains and international markets. This process started years before NAFTA and accelerated after the 2009 financial crisis.

“Today, you can walk into a dealership in the United States and buy a car that was built in Poland, Hungary, the Netherlands, Thailand, China and in several other countries,” said Bernard Swiecki, senior automotive analyst at the Center for Automotive Research (CAR), a nonprofit automotive research organization.

Or you can buy a Camry built in Kentucky.

Why the most ‘American’ car is a Toyota

The Toyota Camry supported more U.S. assembly-plant jobs in 2016 than any other car, based on sales, parts and place of final assembly. When including exports, the Honda Accord shot to the top, according to Cars.com, which uses various factors to rank the most American-made cars.

Read Full Article