Hell Just froze over

Lies, damned lies, and statistics.
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Abdul Alhazred
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Re: Hell Just froze over

Post by Abdul Alhazred » Wed Oct 03, 2018 4:18 pm

The only thing that can be said for certain is it will generate some federal revenue, which the big producers will not mind in exchange for business certainty.

So for example Ford will still manufacture cars in Mexico to avoid EPA fleet averages, but maybe a different proportion of those cars will be sold other than in the USA.

The unspoken premise is that big producers are really in on the negotiations, and not just national governments.
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Re: Hell Just froze over

Post by Grammatron » Wed Oct 03, 2018 5:40 pm

gnome wrote:
Wed Oct 03, 2018 12:55 pm
Point. Now, (blatant goalpost move) is it a lot better?
Appears to be better for USA and its industries.

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Re: Hell Just froze over

Post by Grammatron » Wed Oct 03, 2018 5:40 pm

Abdul Alhazred wrote:
Wed Oct 03, 2018 1:06 pm
The implication during the campaign was no more free trade area, though not necessarily zero treaties.

No one with any sense took it seriously, including many people who voted for him.
Hell of a claim with no evidence.

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Re: Hell Just froze over

Post by Grammatron » Wed Oct 03, 2018 5:49 pm

Anaxagoras wrote:
Wed Oct 03, 2018 3:30 pm
I heard some analysis about this deal today. Apparently for car makers who don't comply with the new rules, the tariffs are 2.5% So, I'm not sure how much effect this will really have in practice. If the cost of opening a plant in America or switching production from one to another is greater than 2.5% of the final price of the car, it's probably simpler to just pay the 2.5% tariff. It'll raise prices for consumers a little bit, but not by a shocking amount, and I doubt it's going to be a huge incentive to "bring jobs back home" if the tariff is so low. In some edge cases it could even have the opposite effect. If you're going to be paying the tariff anyway, figure out other ways to lower costs.
There are also provisions for what Canada and Mexico must pay workers significantly more to deter what you suggested.
Most notably, it requires that 40% to 45% of car and truck parts be made by workers earning at least $16 an hour. The goal is to level the playing field between American and Mexican auto workers and to incentivize manufacturers to build more in the United States. One of the main criticisms of NAFTA is that it prompted American car makers to shift production south of the border, where workers earn much less than their US counterparts.
The deal also mandates that 75% of a vehicle's parts must be made in North America, up from the current 62.5% rule. The Trump administration argues that this will help incentivize billions in new auto sector production in the US.

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Re: Hell Just froze over

Post by Anaxagoras » Wed Oct 03, 2018 10:10 pm

Yeah, I read about that. And although it says "requires" and "mandates", my understanding is that if they don't meet those requirements, it means that a tariff of 2.5% is applied. For pickup trucks it's 25% (the Chicken Tax).

https://www.reuters.com/article/us-trum ... SKBN1JI1YF
The United States currently imposes a 2.5 percent tariff on imported passenger cars from the European Union and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.
Although it says "European Union" I believe it's the same for all WTO countries, so that also applies to Japan, China and anyone else that imports cars to the US. I believe Toyota for example builds pickup trucks in the US to avoid the Chicken Tax.
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