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Automakers, Dependent on Mexico, Face a Rougher Road with Trump (reuters.com)

Posted by msmash on from the aftermath dept.

An anonymous reader shares a Reuters report: The election of Donald Trump as U.S. president puts new pressure on automakers and other manufacturers that have become dependent on open trade with Mexico, and raises the risk they will face higher costs. Automakers could also take a hit if instability in financial markets undercuts the confidence of consumers in the United States and other major markets at a time when growth in U.S. auto sales has stalled. Investors sold off U.S. stocks and the dollar in reaction to Trump's unexpected win. Shares in Japanese automakers, which also rely on Mexico as a production hub for the U.S. market, slid as well, underperforming the benchmark Nikkei index, which fell 5 In afternoon Tokyo trade, shares in Toyota Motor Corp were down 6.5 pct, Nissan Motor Co Ltd was down 6.0 pct, while Honda Motor Co fell 7.8 pct. U.S. manufacturing groups and companies on Wednesday said they want to work with the new administration.

1 of 106 comments (clear)

  1. Re:It was bound to happen. by scamper_22 · · Score: 4, Interesting

    Isn't it strange that America and most Western countries have stricter trade between their own states/provinces than they do with other countries?

    If you're in the US, ponder the interstate commerce clause. Ever wonder why there is a federal minimum wage? It's because when minimum wages were being introduced, it didn't take a PHd to understand that if Alabama had no minimum wage and New York had a $5 minimum wage that a lot of jobs would go to Alabama. New York workers would actually be prevented from competing to get those jobs.

    The result is the rather common sense interstate commerce clause. If goods/services are destined for trade they are subject to be regulated by the federal government... part of it is to ensure common labor, environment standards...

    The question every western country should ask is where did this logic go when it came to international free trade. This is not a left/right issue. It is an issue of the rule of law.

    There are various resolutions to the issue.
    1. Could mandate that any goods coming in from another country must obey the US federal minimum wage.
    2. Could not sign free trade deals with countries with significantly lower labor/environmental rules.
    3. Remove minimum wage regulations in the USA, giving American workers the ability to compete on a level playing field. ...