Under his favorite banner of national security threats, President Donald Trump imposed tariffs of 25 percent on steel imports and 10 percent on aluminum imports back on March 8. Originally, Mexico and Canada were exempt of these tariffs as a way to push for an agreement on NAFTA. However, Trump decided to lift this exemption and since June 1, both countries are subject to these tariffs.
Uncertainty regarding NAFTA is still an issue for companies as well, coupled with a growing fear of what might happen after the elections on July 1. Several players have halted investments in different Mexico states and although there is still hope for an agreement, the US’ protectionist measures have left Mexico’s and Canada’s governments uncertain regarding their neighbor’s position at the negotiation table.
For more on what happened last week, keep straight ahead!
No More Concessions
Frustrated for the lack of progress in trade negotiations, Trump has lifted the exemptions on import tariffs for Canada, Mexico and the EU.
But, these countries will not just roll over. Retaliations worth US$23.12 billion have already been defined from all regions and some will be enforced starting on June 20.
Far from helping negotiations move forward, the US’ measures have riled up its commercial partners that see no certainty in these measures for economic interest.
Projects in the automotive, agrobusiness, textile and construction sectors, including a potential investment from BAIC, have stopped in Puebla due to uncertainty regarding the upcoming elections.
Meanwhile, Japanese companies looking to invest in Lagos de Moreno, Jalisco, are waiting to see what will be the outcome on the NAFTA negotiations before moving forward with new investments.
According to the International Energy Agency, the current global fleet of electric vehicles could triple in the next two years to 13 million from its 3.1 million standpoint.
Meanwhile, EPA and NHTSA have presented a proposal to Trump’s administration to strip California of its right to set its own standards regarding emission control regulations.
Changes in the US Market
Following on Ford’s footsteps, FCA’s CEO Sergio Marchionne has made the decision to focus more on Jeep and Maserati while downsizing Fiat and Chrysler.
After changes in demand, Nissan is cutting production in North America to boost profitability in the region.