During his campaign for president, Donald Trump vowed to cancel U.S. involvement with the international Paris climate accord. He said he would renegotiate - or even terminate - the North American Free Trade Agreement. And the President-elect suggested he might propose tariffs on imports from some of our trading partners.
Now auto makers around the globe are reacting.
Immediately following the election, Ford Motor Co. issued a statement of congratulations to Trump and a pledge "to support economic growth and jobs," despite Trump's condemnation of the company for plans to relocate its small car manufacturing operations from the U.S. to Mexico. The association representing German auto makers Volkswagen, BMW and Mercedes-Benz expressed “fear” that the U.S. would focus on its own economy to the detriment of international trade.
Then came Thursday, and a letter to Trump's transition team from the Alliance of Automobile Manufacturers (which represents all three Detroit auto makers as well as BMW, Mercedes and Toyota, among others). The letter expressed support for relaxing the more stringent fuel economy and greenhouse gas emissions standards put in place during the Obama administration. The United Auto Workers union also said it supported Trump's plans to impose a 35% tariff on cars imported from Mexico and renegotiate the North American Free Trade Agreement.
Already, Mexico is home to dozens of car manufacturing plants, many of them built in the years following NAFTA's 1994 implementation. By 2020, Mexico had been projected to build 25 percent of all vehicles sold in the United States, according to IHS Automotive. This year alone, BMW broke ground on a $2.2 billion factory in Mexico to build 150,000 cars annually, and Audi inaugurated a $1.3 billion facility to build electric SUVs.