The political rhetoric is looking more like reality.
Automotive News reported that automakers and suppliers are starting to envision a world without the North American Free Trade Agreement amid growing signs the Trump administration is determined to gut the 23-year-old deal, which has integrated the U.S., Canadian and Mexican economies, and made the regional auto industry globally competitive.
Going into the fourth round of negotiations last week, U.S. negotiators adopted hard-line positions that are anathema to their trading partners and the auto industry. Chief among them: a call for stricter rules governing the amount of regional content required for products to cross borders duty-free and the way tariffs are calculated for components coming from outside the region.
The tough stance rapidly heightened concern in the auto industry and the broader business community that talks to renegotiate NAFTA could fall apart, allowing President Donald Trump to begin unwinding the accord. Given the pitched negotiating positions, it would take a humiliating capitulation by Mexico, Canada or the U.S. to keep the agreement alive in anything close to its current form.
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