31,000 jobs at risk as Trump hits automakers

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Newly sworn-in President of United State, Donald Trump’s vow to renegotiate North America Free Trade Agreement (NAFTA) and pursue more protectionist trade policies likely to have a negative effect on the U.S. auto industry, a new study found.

The NAFTA has been a net positive for the industry and for the U.S. economy as a whole, supporting high-wage jobs and making North America a more attractive place to do business, the Ann Arbor, Mich., nonprofit Centre for Automotive Research, found in a new study released this month.

Withdrawing from NAFTA and implementing a 35 percent tariff on imported vehicles and parts, as Trump has repeatedly pledged, would cause vehicle prices to spike, the U.S. market to shrink and at least 31,000 U.S. auto manufacturing jobs to be lost, according to CAR.

“Any move by the United States to withdraw from NAFTA or to otherwise restrict automotive vehicle, parts and components trade within North America will result in higher costs to producers, lower returns for investors, fewer choices for consumers and a less competitive U.S. automotive and supplier industry,” the authors say in the report, funded by the Alliance of Automobile Manufacturers trade group.

Trump, who assumed office today, ran for president in part on a platform to renegotiate or withdraw from trade agreements such as NAFTA, which he has called a “disaster,” and bring back American manufacturing jobs lost to globalisation, productivity gains and technological advances.

The president has not toned down his fiery trade rhetoric since his election victory, frequently singling out automakers on Twitter for selling Mexican-made vehicles in the U.S. and threatening to slap them with a 35 percent tariff.

In response, automakers, including each of the Detroit 3, have announced plans to invest in U.S. plants, though they each insist Trump’s repeated threats are not the primary motivation for those investments.

Should Trump follow through on his trade promises, the final results on jobs could be the opposite of what he intends, the report found. For instance, a 35 percent tariff on vehicles imported from Mexico would result in the loss of at least 6,700 North American assembly jobs and 450,000 units of U.S. auto sales, according to CAR.

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