US NAFTA Stance Softening

It looks like all the strong language that the US was throwing out there earlier on in the North American Free Trade Act was all part of its bigger strategy of coming out aggressively to shake things up and then come back to earth and soften its stance on the trade deal.

The change in stance signals that the United States is anxious to get the long standing treaty back on track and try to close it off and the current Trump administration deals with a slew of other challenges across the globe.  Specifically the US is lessening its position on the percentage that a vehicle’s make up must come from a United States producer.   This specific item has been widely seen as one of the biggest sticking points in getting a new deal done between the three countries. It’s original stance was that a minimum of eighty five percent of the content of any vehicle coming into the United States would have to be from a domestic producer. This would have signified an increase of over twenty percent from the current level of sixty two and a half percent.

While the exact number hasn’t been officially confirmed, those close to the negotiations indicate that the United States dropped the 85% demand down to 75% and may be willing to go lower, but there is strong reservations that they would be willing to bring it back to the current 62.5% level.    The specific details are still sketchy, but word is that there would be a further classification of tranches associated with specific types or content going into each vehicle, something like US steel and aluminium needing to account for 70% while parts like engines and the like would be in the 75% range and lesser parts drop as low as 65%.  While there’s no guarantee that this will in fact come to fruition, it indicates that the United States understands the value of the agreement and is willing to explore ways to get the deal done.