Despite continuous negotiations, a resolution on NAFTA remains elusive. After the US Congress’ May 17 deadline for President Donald Trump to notify his intentions of signing a new treaty came and went, governments fear negotiations could go on until 2019. Far from looking for some common ground, it seems Trump is now coming full circle and threatening once again to slap tariffs on auto imports, this time under the guise of national security.

Trump has ordered an investigation to determine the risks auto imports present for the US’ domestic industry and though it might be no secret that both Mexico and Canada are against these measures, it is unclear why the US government is going along with this considering that both the industry and the Senate have voiced their concerns on the matter.

In Mexico, federal elections approach and last Sunday the presidential candidates debated on foreign trade and the future of NAFTA. For more on this subject, do not miss our latest analysis piece.

Want to know what else happened over the week? Buckle up!

NAFTA Talks Still on the Downlow

“We are nowhere close of reaching an agreement,” says Chief US negotiator Robert Lighthizer. Despite efforts to end negotiations before changes in administration in Mexico and the US, talks will most likely extend to 2019.

Greed from the US could obstacle negotiations, according to Minister of Economy Ildefonso Guajardo. The public officer is all for closing negotiations as soon as possible but only if they bring a benefit to Mexico.

Just as he did with steel and aluminum imports, President Donald Trump now threatens to impose a 25 percent tariff on auto imports based on a claim of national security risks.

Industry representatives and members of the US Senate have shown their discomfort with this new automotive-related strategy and have deemed it a “profoundly misguided” idea.

Canadian Prime Minister Justin Trudeau sees no logic to the US’ tariff threat nor a connection to a possible national security risk. He considers it nothing more than an attack in the NAFTA negotiation.

New Technology Advances

Though giants like Apple and Google led the self-driving race in its early stages, it seems that automakers are gaining a much stronger position in the development of this technology leading to new partner relationships between these two types of companies.

Toyota does not give up on fuel cell development. The company announced an investment in a new fuel cell stack plant in Japan that is expected to start mass production in 2020.

They say there is no such thing as bad press. Still, Tesla saw its earnings decrease after Consumer Reports delivered a bad review on the company’s latest venture, the Model 3.

National Development

New plants and strong automotive production led Mexico to its biggest surplus with the US in the past four years. By the end of 1Q18, the value of vehicle and auto part exports to the US amounted to US$16.6 billion, 14.4 percent over 1Q17’s results.

After attracting US$100 billion in FDI, Yucatan seeks to become a new automotive and aerospace cluster and open new trade lines beyond NAFTA.

Kia Motors México expects an annual production of 314,000 vehicles by the end of the year and will use the introduction of the new Forte 2019 platform as a stepping stone for this growth.

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

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