Honda’s plant in Celaya Guanajuato – Photo by Honda

The date approaches for Mexico, Canada and the US to sign the new USMCA and bring a new trade era to North America. However, not everything is finalized. There are some issues to be ironed out after the Democrat House win in the US and the still-standing tariffs on steel and aluminum imposed by US President Donald Trump under national security concerns.

Not all uncertainty has been removed but fortunately, companies are still investing in the country and growing their operations. Moreover, new players seem to be interested in coming to the country.

Want to know more about the week’s news? Buckle up!

Potholes on the Road Toward USMCA

Following the Democrat win in the US House of Representatives, Minister of Economy Ildefonso Guajardo asked Mexican senators not to give in to demands from US legislators regarding further changes to USMCA. “There will be pressure but we have to remain firm,” he said.

Although the investigation under Section 232 in the US regarding vehicle imports is now finalized, results are not yet disclosed by US Trade Minister Wilbur Ross. Still, Eduardo Solís, Executive President of AMIA, says the Mexican industry is protected whatever the results show.

Industry leaders gather at a hearing from the US International Trade Commission to discuss the impact USMCA could have on the country’s economic development. Representatives also highlighted the risk of maintaining tariffs on steel and aluminum and urged the government to lift these before the signing off on the new agreement.

OEM News

After suffering an unfortunate flood in June, Honda’s plant in Celaya is now back in business and working at 70 percent of its capacity, according to Arturo González, President of AMDA in Guanajuato.

Audi announced an investment of US$2.7 million in its plant in San José Chiapa to build a reverse osmosis plant to reduce water consumption from nearby wells. This is Audi’s first venture of this kind and the goal is to replicate the initiative in all the OEM’s plants around the world.

J.D. Power announced the results of its 2018 Vehicle Dependability Study and awarded Kia and MINI the title of the most reliable brands in the Mexican market.

Challenges and Opportunities

Under new USMCA regulations, suppliers will face new challenges to comply with rules of origin. The toughest, according to María Teresa González, Global Trade Director of EY, will be to source 70 percent of the steel and aluminum needed locally.

After a trade mission to Israel from the Laguna Automotive Cluster and visits to 85 companies, 30 of them showed interest to invest in Durango or Coahuila according to José Luis Hotema, President of the Cluster.

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

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