US Seeks to Include Steel Requirements in NAFTA

SEATTLE (Scrap Monster): The United States is reportedly seeking to have NAFTA require the use of steel from North America in automobiles.

Negotiations to revise the North American Free Trade Agreement (NAFTA) have been underway for several months amid threats from the Trump administration that it may simply pull out of the pact. One of the latest proposals from the United States, according to published reports, would add steel and certain other raw materials to NAFTA’s “tracing list” for auto parts. This would require automobile manufacturers seeking NAFTA’s tariff-free benefits to use steel that originates in the United States, Canada or Mexico.

In addition, the United States reportedly wants to increase the amount of overall content within an automobile that must be sourced from NAFTA countries to 85 percent, up from the current 62.5 percent, with 50 percent having to come from the United States.

Some analysts have suggested that, if added to NAFTA, these requirements could backfire for the United States, since manufacturers could choose to buy less expensive materials overseas and pay the United States’ 2.5 percent tariff on passenger vehicles.

Courtesy: AIIS