Budget Estimate Reveals Automakers to Pay $3 More in U.S. Tariffs

Budget Estimate Reveals Automakers to Pay $3 More in U.S. Tariffs

George Hicks

Car manufacturers could end up paying $3 million more in U.S. tariffs over the course of the next decade following the reorganization of the trade rules. The current president Donald Trump is going to rewrite the trade rules in North America and the estimated extra burden on automakers was indicated by the Congressional Budget Office.

The new tariff rules are going to come into play after the United States decided to replace the long-standing North American Free Trade Agreement (NAFTA) with the US-Mexico-Canada Agreement (USMCA). It is believed that it is only a formality for the USMCA to pass the house since it enjoys support from both sides of the aisle.

The estimate from the Congressional Budget Office has stated that automakers would need to raise regional components to 75% under USMCA; under NAFTA, it stood at 62.5%. It went on to add that some vehicles will be ineligible for free trade access under USMCA as well. The agency stated,

Because of that change in eligibility, CBO projects that duty-free imports of vehicles and parts into the United States from the USMCA partner countries would decline.

Leave a Reply

Copyright © 2020. FinanceNews.TV. All Rights Reserved.