Trump’s White House wants to dictate how, where global auto companies make cars and parts to be duty-free under USMCA

The Trump administration wants to dictate how and where global auto companies make cars and parts to secure duty-free treatment under the new Nafta – in its most direct intervention yet to manage trade and production, according to people familiar with the effort.

The issue is being discussed between Trump administration officials, congressional staff, and domestic and foreign carmakers in the context of the legislation that lawmakers will vote on for the trade deal to take effect. The White House wants specific language that would allow it to unilaterally administer the production rules for companies.

The US-Mexico-Canada Agreement, signed by President Donald Trump and his counterparts in November 2018, is still awaiting approval from the US Congress. The White House has touted the new production rules for the auto sector as one area of the deal that’s most beneficial to America.

But the companies, lawmakers and even the US International Trade Commission in an economic analysis have cautioned that the rules are so strict that they would result in higher car prices and lost sales.

The push comes amid Trump’s tariff-led assault on supply chains that run through China. It illustrates how much his administration has drifted from Republicans’ free-market ways and is willing to employ the sort of coercive tools used in command economies like China to force domestic production.