NAFTA Exit Could Cost 31,000 Jobs

Jan. 13, 2017

Jan. 13, 2017—Following President-elect Donald Trump’s pointed remarks toward Ford Motor Company and Fiat Chrysler and his proposition to revise or exit the North American Free-Trade Agreement (NAFTA), the Ann Arbor-based Center for Automotive Research (CAR) released a study that analyzed the impact of these choices, according to a report from The Detroit News

The study found that at least 31,000 jobs in the U.S. automotive and parts industries would be lost.  

CAR’s study warns that a U.S. withdrawal from NAFTA or the application of Trump’s “big border tax” would have adverse effects on the automotive industry. The study also states that the U.S.’s withdrawal from NAFTA or further restrictions being put on “vehicles, parts and components trade within North America will result in higher costs to producers, lower returns to investors, fewer choices for consumers and a less competitive U.S. automotive and supplier industry.”

CAR predicts that Detroit’s three major automakers would be hit the hardest because of their reliance on free-trade with Mexico:“Michigan’s high concentration of engineering and automotive-related employment could be at risk to foreign countries if production shifts outside the NAFTA region. China, South Korea and Japan could replace Canada and Mexico to be the U.S.’s largest automotive parts importers.”

The study also warns that China and the European Union could displace the U.S. as the global industry’s de facto regulatory trend-setter and prompt global automakers to orient emissions, environmental and safety protocols away from U.S. standards.

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