The car industry warns of a string of negative consequences if the president Trump meets your threat of establishing a 35% tariff on the cars imported.
“I Want to build new plants for cars sold here!”. That tweeted at 6:38 in the morning of this Tuesday president Donald Trump to start the day, as if siguera in campaign.
We expected breakfast with the leaders of the big three automotive of the united States, General Motors, Ford Motor and Fiat Chrysler: he asked them to increase the production of vehicles in the country and they believe here jobs. However, the reality is more complex.
Hours earlier, the Center for Automotive Research, a research centre of the automotive sector, warned of how some of the promises of the government Trump can result in a string of negative consequences in the united States: higher costs for producers, lower profits for investors, worse competitiveness for this industry and cuts in numbers of jobs.
Trump, at the meeting of this Tuesday, he pledged again to reduce regulations, and taxes to make it more attractive for companies to operate in the united States. The president insists on its promise of lowering corporate taxes from 35% to 15%, although on average the large u.s. corporations already get a paying a 14%. In the case of General Motors in 2015, despite the gains, failed to pay taxes.
The Center for Automotive Research, by contrast, warns of the risks of trade policies announced or pledged by the new government. This Monday, Trump signed the final output of the agreement TTP with 11 other countries, and reaffirmed its intention to renegotiate –or even abandon– NAPHTHA, that allows for free trade with Mexico and Canada. Is also concerned, and a lot of, the possible creation of a tax on vehicles imported from Mexico.
why provide a destruction of jobs?
The report is fraught with multiple consequences jobs and economic. If Washington were to put a fee of 35% of the light vehicles imported from Mexico, experts are expecting 450,000 units fewer sold in the united States and about 6,700 jobs destroyed because the industry would be much less competitive. “However, that is only the tip of the iceberg”, says the text.
On average, 40% of the components that are inside of a vehicle made in Mexico, originating from united States: parts, engines, transmitters us ensemblan in factories, mexican to finally be sold in dealers by the neighbor to the north. What result? That if you put restrictions on NAFTA, some 20,000 american jobs could disappear, according to this report.
Adding, “as a minimum, 31,000 american jobs could be lost,” says the report signed by six professionals of the Center for Automotive Research. Believe that, long term, could be more, affecting suppliers and other parts of the production chain.
Other experts in the field think like this: if it stops selling cars manufactured in Mexico, will lose many customers; if they move operations to the united States, we recommend the product and earn less money.
“I don’t think that is a mortal blow to the automotive industry, but it will be something very hard. You will have a huge impact on profits,” he told the AP Marina Whitman, professor of business at the University of Michigan and former vice-president of General Motors.
What would you take in the face of Trump’s companies?
car manufacturers of the united States have been reluctant to make the opening of new plants in the country in the last few years, but have expanded some operations of existing plants.
Trump has criticized the automotive for manufacture vehicles in Mexico and in other countries. The three companies on Tuesday visited the White House operate 27 assembly plants in the united States and 7 in Mexico.
for more than two decades, Mexico was an oasis for the american auto industry: offers cheap labor and access to dozens of markets through numbers of free trade agreements.
professor Marina Whitman says that the manufacturers of Detroit can’t build small cars that will give gains in the united States, where a union worker perceives $ 58 per hour in wages and benefits. A mexican worker earns little more than 8 dollars for the same work.
Despite the warning of reports and experts, the CEO of Ford, Mark Fields, said upon leaving the meeting: “The industry feels excited at the prospect of working with the president and his government on the tax policies, regulation and trade to promote a revival of american industry.”
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