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Fact-check: Is Trump’s NAFTA replacement already creating jobs?

On Thursday, President Donald Trump claimed the United States-Mexico-Canada Agreement, his replacement for the North American Free Trade Agreement, is already bringing back jobs and new investment.

He cited news from Toyota, which announced that it would make a $749 million investment in five US plants and add 586 new jobs.

Trump tweeted: “Congratulations @Toyota! BIG NEWS for U.S. Auto Workers! The USMCA is already fixing the broken NAFTA deal.”

Facts first: The USMCA has not been implemented and its future is uncertain. The trade deal was signed by Trump and his Canadian and Mexican counterparts in December, but it needs congressional approval before going into effect. That said, it’s possible Toyota factored the deal into its decision to make more of its vehicles at US plants.

The agreement must pass both the Democratic-controlled House and the Republican-controlled Senate, and lawmakers in both parties have criticized some of its provisions. It’s likely that Congress will wait for an economic impact study due to be published next month by the United States International Trade Commission before considering ratification.

Context: As proposed, the new trade agreement is not all that different from NAFTA. It does however include provisions that put more pressure on automakers to ramp up production in the United States.

One of the most notable changes in the deal is that it requires that 75% of a vehicle’s parts must be made in North America, up from the current 62.5% rule, in order to remain free from tariffs. It would also require more of its parts to be made by workers earning at least $16 an hour.

In a statement sent to CNN, Toyota said these new investments are part of ongoing efforts to produce vehicles where they are sold.

“While we continue to closely monitor trade discussions, our manufacturing investments are years in the making,” a spokesperson said in an email.

Separately from the USMCA, Trump has threatened to to impose tariffs on all foreign-made vehicles and auto parts. If those duties go into effect, it could be another incentive for automakers to invest more in the United States.

CNN News

CNN News

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