Detroit News’ David Shepardson reports that “Donald Trump disclosed in an interview with The Detroit News Wednesday that Ford CEO Mark Fields wrote to him explaining the automaker’s planned $2.5 billion investment in Mexico after Trump criticized Ford in June. And Trump suggested one way to stop automakers’ expansion to Mexico is by moving some production out of Michigan to lower-wage states.”
Trump went on to say that if President he would take production out of Michigan to lower-paying states. But are wages the big reason so many manufacturers are producing in Mexico? Not exactly.
North American Free Trade Agreement (NAFTA) consists of Canada, the U.S.A., and Mexico. NAFTA allows for free trade throughout that region. Mercado Común del Sur, Portuguese: Mercado Comum do Sul, Guarani: Ñemby Ñemuha, Southern Common Market (Mercosur) allows for free trade throughout Argentina, Brazil, Paraguay, Uruguay, and Venezuela.
Mexico is part of NAFTA and has a deal with Mercosur that allows Mexico to import to South America without import tariffs. If the U.S.A. imports to South America the import tariff could be as high as 95%. We should have included all of South America into AFTA.
Will Donald Trump renegotiate NAFTA?