Executive Briefings

Trump's Push for American-Made Could Disrupt NAFTA Supply Chains and Raise Consumer Prices

Shopping for a new set of wheels at a Chevy dealership recently, Patrick Spradlin had a few priorities: a good commuter car, room for his family of five, low maintenance costs and no more than $20,000.

Trump's Push for American-Made Could Disrupt NAFTA Supply Chains and Raise

About the last thing on his mind was where such a vehicle and each of its components - whether engine, car seats or spark plugs - were made. "That's not a make-or-break issue," said the 38-year-old systems engineer from Whaleyville, Md.

But such details about the origin of car parts and hundreds of other products may soon take on greater importance under the Trump administration, potentially translating into significant costs for consumers like Spradlin.

The issue, known in trade jargon as rules of origin, figures to be a major bone of contention as President Trump undertakes his promise to radically overhaul the North American Free Trade Agreement.

The 23-year-old pact is mind-numbingly complicated in its details. But what it boils down to is a system that allows the U.S., Canada and Mexico to trade hundreds of billions of dollars of goods with each other without having to pay duties.

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About the last thing on his mind was where such a vehicle and each of its components - whether engine, car seats or spark plugs - were made. "That's not a make-or-break issue," said the 38-year-old systems engineer from Whaleyville, Md.

But such details about the origin of car parts and hundreds of other products may soon take on greater importance under the Trump administration, potentially translating into significant costs for consumers like Spradlin.

The issue, known in trade jargon as rules of origin, figures to be a major bone of contention as President Trump undertakes his promise to radically overhaul the North American Free Trade Agreement.

The 23-year-old pact is mind-numbingly complicated in its details. But what it boils down to is a system that allows the U.S., Canada and Mexico to trade hundreds of billions of dollars of goods with each other without having to pay duties.

Read Full Article

Trump's Push for American-Made Could Disrupt NAFTA Supply Chains and Raise