Automotive

Rounding Up Free Trade

Either more cars will qualify for tax credits as a result of this, OR the same number of cars will qualify but be cheaper/easier to make since more of the bits and pieces can be outsourced.
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Rounding Up Free Trade

A dispute panel ruled yesterday in favor of Canada and Mexico's challenge against the US interpretation of the auto rules in the new North American trade pact. Feel free to read that sentence again. We sure had to.

Essentially, Canada and Mexico filed a complaint because the United States-Mexico-Canada free trade agreement, which came into effect in 2020, says 75% of vehicle components must originate in North America. They, and the US, did not see eye to eye on how to calculate that number.

Rounded up. The US says only the content of the entire vehicle should be rounded up, while Canada and Mexico say if 75% of the engine is North American-made, they should be allowed to round it up to 100%.

A particular debate, but now that it is resolved, component makers north and south of the US border will benefit.

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