The impact of trade on the North American auto industry

According to recent research by Alonso de Gortari, 38% of the value added in cars produced in Mexico and then sold in the U.S. originates from the U.S.2 Today 14 companies produce vehicles in North America-and all but two of them are headquartered overseas, said Evans. [...]his research revealed tha...

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Bibliographic Details
Published in:Chicago Fed Letter 2019 (427), p.1-6
Main Author: Klier, Thomas H.
Format: Article
Language:English
Subjects:
Automobile industry
Central banks
Engines
Free trade
North American Free Trade Agreement
Tariffs
Trade policy
Trade relations
United States-Mexico-Canada Agreement
Vehicles
Vice Presidents
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Summary:According to recent research by Alonso de Gortari, 38% of the value added in cars produced in Mexico and then sold in the U.S. originates from the U.S.2 Today 14 companies produce vehicles in North America-and all but two of them are headquartered overseas, said Evans. [...]his research revealed that the overwhelming majority of engines and transmissions for light vehicles produced in North America are sourced from within the region (only 14% of engines and 24% of transmissions were sourced from outside the region in 2016). According to Rubenstein, today there is a high degree of integration in auto production across North America. [...]USMCA would also require that auto producers in North America procure at least 70% of their steel and aluminum from within the region.
ISSN:0895-0164
0895-0164
2163-3592
DOI:10.21033/cfl-2019-427