Published On: Tue, Apr 23rd, 2019

Pence to visit Michigan to tout new North American trade deal: sources

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U.S. Vice President Mike Pence speaks to reporters outside the United Nations Security Council at U.N. headquarters in New York
FILE PHOTO: U.S. Vice President Mike Pence speaks to reporters outside the United Nations Security Council at U.N. headquarters in New York, U.S, April 10, 2019. REUTERS/Brendan McDermid

April 23, 2019

By David Shepardson

WASHINGTON (Reuters) – U.S. Vice President Mike Pence is set to visit southeast Michigan on Wednesday to make the case that the North American trade deal intended to replace NAFTA would boost the auto industry, industry officials said.

Pence will speak at an event with automakers and auto suppliers in Taylor, Michigan, the officials said, and is expected to tour a Ford Motor Co truck plant in Dearborn as the administration works to convince Congress to ratify the new trade deal, the United States-Mexico-Canada Agreement (USMCA).

Also expected to attend and speak on a panel ahead of Pence’s remarks are the chief executives of two major auto suppliers – Dana Inc and Magna International Inc – as well as executives from Ford, General Motors Co and Fiat Chrysler Automobiles NV.

The Michigan Manufacturers Association and two auto supplier associations sent an invitation to the discussion on the USMCA that will include Pence that was seen by Reuters.

The U.S. International Trade Commission (ITC) on Thursday estimated that under the deal U.S. auto industry employment would rise by 30,000 jobs for parts and engine production, but that the number of U.S. vehicle assembly jobs would decline. U.S. vehicle prices would rise up to 1.6 percent, causing consumption to fall by 140,000 units per year, or about 1.25 percent of 2017 sales, the report said.

The Trump administration and U.S. automakers disputed the ITC report, saying instead that the new trade deal would create 76,000 automotive sector jobs within five years as automakers invest some $34 billion in new plants to comply with the pact’s new regional content rules.

The White House did not immediately comment on Pence’s trip.

The auto industry is deeply concerned about the Trump administration’s consideration of whether to impose up to 25 percent tariffs on imported cars and parts on national security grounds.

The industry fears those tariffs would add thousands of dollars to the cost of vehicles and potentially cost hundreds of thousands of jobs throughout the U.S. economy. U.S. President Donald Trump is expected to act on confidential recommendations of a report looking into the possible tariffs by mid-May.

Bob Carter, head of U.S. sales for Toyota Motor Corp, said at a forum in New York last week that if tariffs are imposed “quite frankly that’s pulling the pin out of the grenade… I don’t believe the U.S. economy can run out of the room fast enough if that happens.”

(Reporting by David Shepardson; Editing by Bill Berkrot)

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