What would happen if NAFTA included a 35 to 50 percent US content requirement for autos? The Peterson Institute for International Economics concludes that US content requirements would decrease production in North America and fail to promote US manufacturing. Producers with a lower level of US content would likely find it too costly to shift supply chains and would instead opt to pay the 2.5 percent tariff. In effect, “some of the parts that formerly came from the United States might then be replaced by Asian or European parts.” Read the full article here.
