U.S. starts dropping auto-part bombshell demands at NAFTA trade talks
The United States is presenting a triple-whammy of a demand on auto parts at the NAFTA negotiations.
It's one of the biggest issues of the talks and sure to provoke a backlash on multiple fronts.
Industry sources say the U.S. negotiating team has shown them the proposal they are expected to present Canada and Mexico as early as today.
It contains three ideas that automakers say would complicate production: requiring all cars sold without tariffs to include 85 per cent North American content, 50 per cent U.S. content and an elaborate, detailed listing of parts that didn't exist in 1994 when NAFTA was introduced.
One industry representative called the demands so comically impractical and potentially damaging for producers across the content that he can't believe the U.S. is serious about it.
He says such a proposal would prompt many auto companies to consider simply ramping up production in Asia and paying the necessary tariff.