USMCA advances toward ratification and despite doubts from the Senate, Minister of Economy Ildefonso Guajardo said all 12,000 rules but five were beneficial to the Mexican economy. Mexico, the US and Canada still have to finalize some details on the agreement before it can be signed and the industry is aware of the challenges ahead. Nevertheless, the general sentiment says the new deal will be positive and new investment will come.
Beyond our borders, the autonomous race heats up and steering wheel-free cars might hit the pavement soon. That means new technology must be developed to protect not only passengers but pedestrians as well. Read all about it in our latest blog.
Want to know more about what happened over the week? Keep straight ahead!
Impact to the Country
Appearing before the Senate, Guajardo stood up to defend his position regarding USMCA and the benefits it would bring to the country. Furthermore, he denied Mexico would have to relinquish its sovereignty in terms of potential trade agreements with other nations including China.
Rating company Moody’s says effects of new rule of origin are still uncertain but clarifies that it is unlikely companies will divest from Mexico in favor of the US.
Challenges to Come
USMCA establishes three different auto part categories: essential, primary and complementary. Each of these will have to comply with a certain percentage of local content and will have a four-step scheme to reach the goal.
Manuel Nieblas, Partner and Manufacturing Industry Leader at Deloitte Mexico, says the country will receive between 5 and 10 percent more investment in the automotive industry but warns that it should be oriented to future-vehicle components.
Tesla, Still in the Middle of the Storm
After Elon Musk’s fight with the US Securities and Exchange Commission (SEC), Tesla’s stock continued to plummet, especially after David Einhorn, Director of Greenlight compared the situation to the fall of Lehman Brothers right before it went bankrupt. By October 8, the stock price fell to its minimum in 18 months.
Despite the feud, Tesla, Musk and SEC once again reached a settlement that is now in the hands of US District Judge Alison Nathan in Manhattan for approval. Part of the deal includes Musk stepping down as Chairman of the company and even though the Financial Times hinted James Murdoch, CEO of Twenty-First Century Fox and Board Member at Tesla, may be his potential successor, Musk denied it.