An independent government report on President Donald Trump's new North American trade deal estimates it will lead to higher car prices for U.S. consumers and a decline in auto sales even as it has a modest positive impact on the broader economy, undercutting one of the White House's key sales pitches for the agreement.
In its assessment of the new U.S.-Mexico-Canada Agreement, the International Trade Commission on Thursday found it would have a modest beneficial impact on the American economy, adding 0.35 percent, or $68 billion, to U.S. gross domestic product in the sixth year after it took effect.
The report, however, offered a much more skeptical view of tough new auto production rules, saying that while they would add 28,000 jobs in the auto sector they would actually lead to a fall in vehicle assembly jobs due to higher production costs that would be a drag on U.S. manufacturing more broadly.
The ITC analysis points to a debate over one of the Trump administration's main argument for USMCA as it seeks lawmakers' approval in the months to come: That it will lead to a surge in investment and jobs in an auto sector that has become one of the main drivers of the rising trade deficit with Mexico over the past 25 years.
