Trump v the US Car Industry

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Trump v the US Car Industry

The Ford motor company in the US has made the decision to cancel a $1.6 billion investment in Mexico and invest an extra $700 million in its Michigan plant.

This move can definitely be attributed to President-Elect, Donald Trumps’ economic nationalism.

Interestingly, the announcement by Ford was made on the same day that President-Elect Trump launched his attack on General Motors for producing their cars in Mexico and then importing them back into the United States.

Donald Trump announced on Twitter,

“Build them in the USA or face big border tax”

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The message is clear and the manufacturers have to respond as it would seem that they will be hugely sanctioned by the new administration.

At the moment cars which are being manufactured in Mexico can move across the border tax-free thanks to the North American Free Trade Agreement (NAFTA).

As we heard quite a bit during the American Presidential election campaign, the NAFTA agreement is something that Donald Trump is set to attack and dismantle. According to Trump, the NAFTA deal is causing the loss of US manufacturing jobs to cheaper labour in other countries such as Mexico.

GM was quick to take to the airwaves to assure their US customers that most GM cars are still made in the US.

While the Ford Focus will continue to be made in Mexico, Ford’s boss insisted they will be switching investment in petrol cars in Mexico to electric cars in Detroit going forward.

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