Trump just signed a new trade deal with Mexico, though, that (supposedly) supersedes our former NAFTA deal wth them. We'll have to wait and see what those details are, and what they allow.

Interesting.....Trump based much of his 2015-2016 campaign on NOT signing trade deals with countries, and bitterly criticized those that were already in place. For him to formally sign this one means he must be convinced that this particular one is (now) in our favor.

 

 

Where do you get your inside information about what the US Congress will do? Even those of us who live here can't figure that out. Remember, the naysayers said Trump could not scrap the Iran nuclear treaty but he did. NAFTA was a worse deal for the US than the Iran treaty so I fully expect that it is dead and the new deal will be a two party deal with Mexico.

 

Yes, that's the way I understand it, too.

 

Canada will say uncle and give. The sledge hammer that is being held over Canada is that Ontario stands to lose half its manufacturing capacity and will go into a recession. Canada's largest economy. A few thousand rich dairy farmers in Quebec vs 160,000 auto manufacturing jobs in Ontario. A 900,000 cut to auto output in a total manufacturing output of 2M. Mexico already knows what is going on, the Canadians don't.

 

 

I suppose, unlike you I don't assume I understand the realities of carmakers profit margins and what is feasible for them better than they do.

If Ford isn't going to do it, its not profitable for them to do it. Bottom line. Ford knows more about selling and marketing cars profitably than you do.

And agreed on NAFTA, NAFTA is not dead and Congress has to accept a new deal, which they won't without Canada. Thats what the Senate leadership has said.

 

The reason that the Buick Envision, Cadillac CT6 Hybrid, Ford EcoSport and, previously, the Lexus RX and ES, were produced overseas and imported here into North America is because there is not enough demand here to maintain local North American (Canada, USA or Mexico) assembly. It was cheaper to continue production overseas and ship them here.

In the case of the Envision, CT6 Hybrid, EcoSport and Ford Focus Active, the fact that they are built in China is because there is enough demand there to maintain assembly lines to build those models, and build costs there are still low enough to be able to export from those countries into North America.

No automaker is able to just make available assembly line slots (build a new line or re-purpose an existing line) and build any model they wish to on that line. There is a certain, minimum critical mass before it becomes profitable to build a new model. Below that volume and it is less expensive import that build here.

GM's and Ford's product planners had forecast certain demands for the Envision, CT6 Hybrid, EcoSport and Focus Active. That forecast demand drives everything.

The forecast demands for these GM and Ford (and previously, for the RX and ES) probably came in below their critical mass numbers. It was cheaper to import and sell here (and still make a profit) than to build and sell here (which would have meant selling at a loss).

If, however, build and import costs go up so that it is no longer profitable to build overseas and import, the automaker will just forego selling the model. Importing to supply the low demand is not profitable, and building here to supply the low demand is also not profitable, so there is little choice but to not sell those models.

This is the exact situation that a number of European and Japanese brands -- including Peugeot, Citroën, Renault, Fiat, Suzuki, Isuzu -- faced: sales (demand) were too low here to afford to build here and, eventually, it just became too expensive to import and sell only a few any longer. This is the situation that low-volume models -- such as the top-of-the-lineup German and Japanese coupes and sedans -- may face if high import tariffs were to suddenly be imposed on imported cars.

 

Can't just make a blanket statement like that. While Ford has done some things spectacularly well (like the Model T, Model A, 1964 Mustang, 1986 Taurus, 1990 Explorer, and the continuing strong sales of the F-150), they also have a long history of making serious mistakes......Edsel, Merkur, Pinto, Mustang II, Excursion, Lincoln Blackwood and Lincoln Mark LT pickups, among others. Although you may disagree because your father owned one, a number of reviewers and historians also consider the first FWD Lincoln Continental of the 1990s to have been a mistake. The current FWD/AWD Continental, though a far better car than the one 25 years ago, has not exactly been a sales success either.

 

Well then you should call them up and offer your services.

 

Glad you can see NAFTA is not dead. There is no trade deal between Mexico and the United States for the others in this thread. Trump wants a Mid Term win, he is full of it and that why he is making it sound like there is a deal. I am not sure how the Senate works, but Trump cannot renegotiate NAFTA without Canada, he also cannot sign a trade deal with Mexico without giving notice that he is exciting NAFTA. Let's hope he loses the mid-term and Canada stalls

 

I gave my services to my country, in Federal service, for almost 35 years. Thank you, but I'll enjoy my retirement.

 

President Trump did NOT just sign a bilateral trade deal with Mexico. Everything in the American news about a USA-Mexico Free Trade Agreement was just typical bombast. It was -- and will only be -- an agreement on certain items that will form part of the revised, new NAFTA.

President Trump can "sign" a free trade agreement but it must be ratified and enacted by Congress, and Congress has made it known that it will only ratify a revised, trilateral NAFTA, and not individual, bilateral agreements. If President Trump wants to have new, bilateral agreements rather than a new NAFTA, he must first withdraw from NAFTA, which would require 6 months of notice.

There has been no withdrawal request from the USA, Canada or Mexico.

And because it was Congress that enacted NAFTA, it is argued that only Congress that can formally withdraw from NAFTA. The present Congress has made it known that it will not do that. The next Congress (after the coming mid-term elections) may decide to agree to withdraw from NAFTA but who knows the makeup of that new Congress?

 

That is markedly changing, though, with the tariffs. What worked in the past will not necessarily work in the future.

 

This article from Business Insider considers it a trade deal.

https://www.businessinsider.com/trum...roblems-2018-8