(Bloomberg) – footwear Manufacturers, cars and giants of the retail faced with embarrassment in its international operations now that President Donald Trump is proceeding with a fundamental review of the commercial policy of the united States.
His decision to remove the united States of the Agreement trans-Pacific Economic partnership (TPP) and its commitment to renegotiate the Free Trade agreement of North America (NAFTA) are forcing companies to rethink supply chains and capital investments in a new era of protectionist policies. The decisions of Trump weigh in special on importers such as Nike Inc. and Ford Motor Co. now that the president seeks to increase domestic production and create jobs in the country.
“Any company that is now global is trying to understand what that is going to change,” said Simeon Siegel, analyst at Instinet LLC, a broker of New York. The effect on the supply chains, taxes, and cost structures obviously is unknown.
During his campaign, Trump ridiculed routinely trade agreements by "kill jobs", he called the TPP “a potential disaster” and said that NAFTA was one of the worst agreements in history. The president has said he will keep american jobs are outsourced abroad and has threatened to impose punitive tariffs on imports.
“Many multinational companies and industrial enterprises will be very disappointed by the abandonment of the TPP and will face a lot of uncertainty with the renegotiation of NAFTA,” said Caitlin Webber, an analyst of trade policy from Bloomberg Intelligence.
NAFTA
Wilbur Ross, candidate for secretary of Commerce Trump, has a key role in shaping the views of the president on NAFTA, ” said Steve Miller, CEO of International Automotive Components Group, of which the private equity firm of Ross, WL Ross & Co., it owns more than 60 percent.
“I am glad that the responsible adults that surround Trump will make things better for the united States, without prejudice to trade,” Miller said in an interview. “Wilbur has said he supports adjusting the NAFTA, no to cancel".
to Renegotiate the NAFTA could have far-reaching implications for the automotive industry, which imported passenger vehicles by almost US$ 80,000 million and auto parts from Canada and Mexico to the united States for around US$ 68.000 million in 2015. This accounts for around 44 percent of the imported vehicles and 47 percent of the auto parts, according to the Office of International Trade.
car manufacturers are already postponing their investments until they know how will be the commercial relationship between the united States and Mexico, said Eric Noble, president of The CarLab, a consultancy in Orange, California. The additional costs could make the US$ 1,000 million automobile manufacturers to invest in each new assembly plant is to be too risky until the executives know what Trump wants to do, he explained.
auto manufacturers have been a frequent target of criticism from Trump, who threatened to General Motors Co. this month with a “big tax border” to the automobiles manufactured in Mexico. The company subsequently announced an investment plan of the united States. Also, Ford canceled its plans to build a new plant in Mexico, and he said that would create 700 new jobs in the united States in its place.
on Tuesday, the president of the united States to meet with executives of Ford, Fiat Chrysler Automobiles NV and General Motors Co., said his press secretary and Sean Spicer.
Both Canada and Mexico have said they are willing to talk about the modernization of the NAFTA, signed 23 years ago. The insistence on a mechanism to balance the trade between the united States and Mexico, or to promote an import tax specifically for the mexican products to compensate for the value added tax of that country would represent a problem for the agreement, said Scott Lincicome, international trade lawyer for White & Case in Washington.
The negotiations could also include changing or removing the panels of the NAFTA that are in charge of disputes and amendment of the rules of origin, which establish how much local content is required to make a product eligible for the lower tariffs of the NAFTA agreement.
TPP
For its part, the cancellation of the TPP could be a blow for the main companies of clothing and footwear such as Nike. The biggest sports brand in the world, which manufactures Air Jordan and other models in Asia, had the covenant to save on import tariffs. The company gets about 40 percent of the shoes sold in Vietnam, a nation that is a member of TPP.
TPP is also would have generated savings for retailers, such as Target Corp., Foot Locker Inc. and Walmart Stores Inc. The reduction in import costs would have been US$ 450 million a year, according to Footwear Distributors and Retailers of America.
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