NAFTA: the bilateral talks with the Mexicans yielded a deal which the U.S. could accept – rules of origin requiring 75% (up from 62.5%) of the content in autos to be from North America, 40-45% of content to be made by workers earning at least US$16/hour, a 16-year time limit for the deal (renegotiable in six years). Predictably, Trump is looking to push ahead without the Canadians if they do not agree to big concessions.
NAFTA Confirmation: as congress has given fast track negotiation authority (providing an up-or-down vote on the final deal – no amendments) to a three-way deal only the potential for ratification of a bilateral U.S.-Mexican deal is clouded. The mid-terms in November also raise the stakes regarding the ongoing Canadian talks as any deal which Trump can claim as a victory could help Republicans in the elections.
Trump/Trade: reportedly, the U.S. administration is poised to add an additional US$200bn of imports from China to a higher tariff level within the next week. This, presumably, is mixed up with Trump’s assertions that China is not helping with North Korea. Trump made comments during an interview stating that he is considering withdrawing from the WTO. The EU informally offered to drop all autos tariffs, if reciprocated.
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