Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead)

President Donald Trump has dropped his demand for at least 50 percent US content in all Canada and Mexico-made vehicles that will be exported to the US in what seems like a rare concession on his tough stance.

Trump’s demands had been one of the major obstacles in reaching a NAFTA 2.0 agreement. However, after US Trade Representative Robert Lighthizer’s meeting with industry leaders in the US and negotiations in Washington with Canada’s Foreign Minister Chrystia Freeland, the US government allegedly agreed to drop this issue according to a report from the The Globe and Mail.

“It is not confirmed but we hope it will,” says Óscar Albin, Executive President of the National Auto Parts Industry. “(The proposal) is completely unfeasible and unreasonable in a free trade agreement. I think it is irrelevant in the negotiation and it will go away at some point.”

Canada has been very active in seeking support from the industry to counter US protectionist measures not only regarding NAFTA but also in the steel and aluminum tariffs imposed by President Trump. “You cannot say that Canada is a national security risk to the United States when we are so partnered on so many different issues,” said Prime Minister Justin Trudeau in an interview with Bloomberg.

The efforts paid off and both Canada and Mexico were exempted from the tariffs. Now, Trudeau is optimistic regarding the future of NAFTA but says he remains firm on his position to standing up for the Canadian people. “I am not flinching on that,” he said. “Yes, there are still a couple of people saying, ‘Oh, what is going to happen on NAFTA?’ But I am really confident we are going to get to the right place on NAFTA.”

The data used in this article was sourced from Automotive News, Bloomberg and El Economista.

Don’t forget to follow us on twitter at @mexautomotive and @mexautomotriz for the latest industry news.

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