USMCA Should Help Michigan Economy

The trade deal struck over President Donald Trump’s desk is expected to give Michigan’s economy a boost.

It’s called the United States-Mexico-Canada Agreement, and it will replace NAFTA once it comes into effect.

This will directly affect two of Michigan’s most important industries.

The trade deal is designed to ensure more auto parts come from North America and to ensure that automakers can’t rely on cheaper labor in Mexico.

Cars built in Canada and Mexico must meet the following conditions in order to avoid tariffs:

– 75 percent of parts used must be from these countries or the United States

– At least 40 percent of the car must be built by workers earning a minimum of $ 16 an hour.

– Vehicles that do not meet these requirements will be subject to a two-and-a-half percent tax if shipped to the United States

The deal is also supposed to help farmers who export more than $ 800 million worth of vegetables, dairy products, seeds and more to Canada and Mexico.

The State Department of Agriculture and Rural Development says having a deal in place will allow more Michigan businesses to sell there.

This includes the Canadian dairy market, which has been difficult for American farmers to enter.

Now with any trade deal we have to wait a bit to see how things turn out and we may not know the real impact for a few years.

Overall, Michigan exported more than $ 36 billion worth of products to Canada and Mexico in 2018.

The three largest categories were transportation equipment, machinery and chemicals.

Canada has yet to approve the USMCA before it can go into effect.

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