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- [00:01]
Scott Miller
I'm Scott.
- [00:02]
Bill Reinsch
I'm Bill and we're the Trade Guys. You're listening to the Trade Guys, a podcast produced by CSIS where we talk about trade in terms that everyone can understand. I'm Alex Kisling and I'm here with Scott Miller and Bill Reinsch, the CSIS Trade Guys.
- [00:21]
Scott Miller
Thanks for listening to the Trade Guys. On this week's episode, we have a special guest, Jennifer Sevassian, president and CEO of Autos Drive America. We talk about the North American market, the renewable prospects for usmca, all this and more on this week's the Trade Guys. Well, welcome to the Trade Guys. This is Scott. And Bill and I are on our own today without Alex, but we're not really on our own. We have a special guest which we'll get to in a moment. We're delighted to have her to talk about usmca, or as we call it, the beloved usmaca, and negotiations that are going on this summer and how it affects a very important industry that is automobile. Before we get into the discussion with our guest, Bill has an update on the never ending saga of IPO refunds from the Customs Service.
- [01:13]
Bill Reinsch
So, Bill, this is becoming a weekly occasion and it's probably going to go on for a while. The Customs Service produced another sworn statement to the court on May 12 and indicated that they have now prepared $35.46 billion for refunds. They weren't exactly clear about when the check would be in the mail. And of course it won't be in the mail. It'll be electronic, but the metaphor is still good. But that's apparently all been approved and is in the works. So some people will be getting their money back. That is the product of more than, well, more than 8 million liquidations or reliquidations of entries, which means that there's a lot more to go from this. Remember the goal. Well, not the goal. The max is around 165, 166 billion. So this is just the beginning, but it's not a small number. 35 billion. And we'll be watching to make sure that the money actually goes out. There was also a footnote, which is that there were 1,880 applications for refunds that cannot be fulfilled because the. The applicants have not signed up for the electronic system that customs is now operating. And we've been blabbering about that for the last three months, telling people, you don't get your money if you don't sign up. And so here's an example of the inevitable 1880 people have not signed up and the money's there. And I guess in those cases the money's been approved, but it won't be sent by mail. So to those people, and I have no idea who you are, sign up. Now onto today's subject. As we threatened for the last several weeks, we're going to spend two weeks in May talking specifically about USMacca. And today we're delighted to have with us Jennifer Savabian, who is the president and CEO of Autos Drive America. And she's going to explain who those people are in just a minute because there's more than one automobile association. In fact, there's, I think, frankly, too many for me to count. But she's going to talk about hers. She's a government relations professional. She's been the ada, which I always think of that as the Americans for Democratic Action. But it's the Auto Drive America president since April of 2020, and she was the first one. So prior to that, she was the executive vice president for government affairs at RILA Retail Industry Leaders Association, a group that we know well. And before that, music to my heart. She had a long career on Capitol Hill. I was there for 20 years. I don't know if you were there for longer than that, but. Well, then I've got her beat. But most of her time was with the Ways and Means Committee as staff director and general counsel. But she served on other committees and in the process got numerous awards, none of which I ever got. So I'm jealous. She was one of the top trade association lobbyists, according to the Hill, seven times. I never made that when I was running the NFTC. She was one of the top 10 lawyers on Capitol Hill, which I wasn't eligible for. And more important, she was one of the fabulous 50 top congressional staff members. Another award I never won, so I'm jealous. But it's obviously a record of great accomplishment and we're delighted to have you with us. And to start us off, Jennifer, tell us a little bit about who Autos Drive America is, who your members are, and what their views on USMCA are.
- [04:28]
Jennifer Sevassian
Well, hello. Thank you, Bill and Scott. It's a pleasure to be with both of you. And Bill, that was quite an introduction. And yes, you definitely, definitely have me beat on time on the Hill. I was put in about 16, 17 years, so you got me beat by a little bit there. But I'm very pleased to be with you both today and talking about such an important matter as usmca. So, yes, let me start off by telling you a little bit more about Autos Drive America. So we are a trade association here in Washington, D.C. and we represent the international automakers and their operations here in the United States, just the international automakers. Our big focus is trade policy, but also making sure that there's like a level playing field for all automakers here in the US and making sure that, you know, really, that the policymakers here understand the footprint of international automakers here in the US So. So that's who I represent, my team and myself. And we're very proud and pleased to do so and give you a little bit more flavor about international automakers here in the U.S. you know, honestly, we like to talk about them as the growth of the US auto market because they really have been since 2008, really with the growth of their investments and their production and their workforce. In fact, from 2023 to 2025, they actually out produced the Detroit automakers here in the US by over a million vehicles. During that time period, produced over a million more vehicles than they did. They've invested 124 billion into their U.S. operations. They produce between 48 and over 48% of all production here in the United States, with 31 facilities across the country. And they directly employ 162 employees, about 100,000 of those in manufacturing. So that's who my membership is. So your question then was about do we care about USMCA and what does that mean for us? Absolutely. My members definitely care about usmca. It is one of our top policy issues this year. We are definitely advocating for the renewal of the agreement. It's critically important to the US Auto industry given the integrated supply chains that we have among the North American region. And of course, you know, we've been advocating, I would say, honestly, really for. Probably best way to describe it is really for like, kind of three main things. One, we want to maintain the structure of usmca. So we want to make sure there's an extension of the agreement as a trilateral agreement. We also want to make sure that it's workable, right? That if there's any new product, specific rules or changes made to what we are faced with today, that they're workable and that they're narrowly tailored. They don't hire costs or compliance challenges. And we want to preserve the benefits of of usmca. So we want to return to preferential treatment for qualifying goods.
- [07:02]
Scott Miller
Jennifer, we're delighted to have you here because this is a very important industry in the United States. It touches a lot of American consumers, North American consumers. And you faced a lot of pressure over the years. In fact, the most recent revision where NAFTA became usmca, there were a number of changes to what it took to qualify for the preference, that is the rules of origin and how they were structured and the complexity of those rules. Now a couple things have changed since then. One is there's always seems to be an appetite for more change. The second is that the tariff preference for at least autos has increased pretty significantly. At the time of the USMCA negotiations, a two and a half percent was the MFN tariff for vehicles that did not meet the rule of origin. But the NAFTA rule of origin or then MCA USMCA rule of origin provided a relatively small preference. The preference is bigger now. But what can you tell us about the complexity of the rules and what the expectations are for the next round?
- [08:02]
Jennifer Sevassian
Yeah, well, so I would start by saying just to make sure that everyone understands that, you know, USMC I think is includes some of the most complex and most stringent automotive rules ever negotiating in a trade agreement. So you mentioned kind of NAFTA right before. And so where we went from NAFTA to usmca, significant changes in, in what was required for the automotive industry in order to have qualifying goods, right? In order to get this duty free treatment. And really those rules were kind of stated to kind of make sure that there was an increase in North American content. And they did that in a couple ways. So they created in USMCA a regional value content, right? And they increased the amount from where NAFTA was. So you know, NAFTA was 62.5%, a percentage of a vehicle's value. Had it originated from North America, in USMCA it moved up to 75%. So a significant increase in the regional value content required. Also each core part under USMCA has to independently meet the 75% regional value content. So that was also very significant. Additionally, USMCA included a first of its kind sourcing requirement for metals. So now there's at least 70% of steel and aluminum. Purchases by value must originate in North America. And for the first time ever seen in a trade agreement, they introduced a labor value content. So 40% of a vehicle's production must be performed by workers earning at least $16 an hour. So some significant changes from NAFTA to where we are today under usmca. And you know, honestly, the automotive industry, for those who decided to work to comply with it, invested a lot of money, billions into trying to meet these increased kind of rules of origin, these stringent rules, in order to get this preferential treatment, which you're right, if they, if the goods qualified, then there was tariff free. They were able to come into the US Tariff free. And that's not where we are today.
- [09:50]
Scott Miller
Well, it's one of those things that sounds like a lot of our listeners may be saying, hey, I thought there would be no math. There are a lot of details in this thing. Complexity of the rule itself makes it very large challenge to demonstrate compliance with the rule and demonstrate that you are qualified for preference. What are you hearing from your members about that?
- [10:08]
Jennifer Sevassian
Yeah, there's no question. They had to go through, you know, significant processes and trying to comply with these requirements, these that I just mentioned. And I did it at kind of high level for you all. There's a lot more detail and intricacy that goes into each of the things that I mentioned. So there's a definitely increased compliance cost that went with that. No question. And you know, for many of the members, they ended up having to get an alternative staging regime, an ASR is what we called it. Right. So they gave them some time needed to actually comply to meet these rules. Right. Because there was such a significant increase in what was required from NAFTA to usmca. And so many of my members in the Detroit automakers did that. Like I said, they invested billions. They went through the effort that was needed in order to comply and to reap the benefits of usmca, which is a duty free treatment.
- [10:55]
Bill Reinsch
We did a study of this when the agreement was being included. So we had no data. But what we anticipated at the time was two things. One was that the new rules that you've described would create a shift of probably parts and components manufacturing from Mexico to the United States and Canada and a shift of jobs from Mexico to the United States and Canada because of the $16 an hour requirement, which Mexico doesn't meet. But Canada and the United States for the most part do. The second thing that we anticipated, which I think turned out to be true until Trump plugged the loophole, was the question of compliance costs. And it seemed to us that if compliance costs exceeded the two and a half percent tariff, then companies wouldn't bother to comply. It was cheaper just to bring in the autos out of compliance and pay the tariff. That was fine as long as the tariff was 2.5%. Once it was 25, it's different. And I assume therefore that particular hole was plugged. Although the preliminary data pre Trump suggested That in fact that was happening, that there were more cars coming in outside the compliance zone than there were previously. But the trend never got off the ground because Trump stepped in and changed everything. Were we right about that? Does it have that effect on production? How have your members responded? Have they responded by building in the US by shifting parts and components to production to the US Continuing in Mexico and maybe exporting from the United States to Mexico parts and components? What's been the trend that you can see?
- [12:23]
Jennifer Sevassian
Yeah, so no question. I, you know, I think the ITC does annual reviews. Right. Studies on the impact of USMCA to the U.S. economy. And so looking at their own numbers, they show that while North America, the region as a whole, has certainly benefited from usmca, the US has benefited the most out of the three countries. And I will tell you that looking at the US Only if you look at the entire auto industry. So not just my members, but all of them, all the OEMs, you know, they have invested about 335 billion since USMCA went into force to today and created 19 new production facilities here in the U.S. again, I'm just talking the U.S. so there was significant investment in the U.S. in order, again, to meet the requirements of USMCA. So I think that it has been beneficial for the U.S. market. But of course, it's been beneficial also for Mexico and Canada.
- [13:14]
Bill Reinsch
Well, I think the good to know, I guess it seems to me that the goal in 2018 was basically to force more North American content and force the foreign manufacturers to build more in all three of the countries. It looks now from the various things that Trump and Ambassador Greer have said from time to time. I don't think they've tabled anything formally. I don't know what it is. But it seems from what they're saying that this time around, they're more interested in increasing US Content specifically, as opposed to Mexican and Canadian content. From the standpoint of your members, which are going to be on that firing line, how much more American content can they put in and how much of a burden is this going to impose on them?
- [13:53]
Jennifer Sevassian
Yeah, so I think there's no question, I think the President, I think, has been, has been pretty clear that he's looking. He wants to lower the trade deficit. Right. With Mexico and Canada, and I think in particular with Mexico, you know, it is larger when it comes to automotive and we're talking about Mexico. So he wants to lower that trade deficit. And yes, he wants more US Production. I would argue, based on the factors that I mentioned at the beginning that, you know, my members certainly have been doing that U.S. investment. But he wants even more. He has said he doesn't care about Canada or Mexico auto production. But I think it's important for everyone to understand with usmca, you know, the supply chains are so integrated among the three countries that you can't really just look at one country alone. Right. You know, the US Auto industry is successful because we have Mexico and Canada helping us with it. Right. It's a question of scale of production. Right. And so we're able to do more and do it better. You know, when we're talking about the North American region as a whole versus just one country by itself, and there's plenty of examples of that to show. For example, I could use Honda and Toyota, my members who created and produced engines right here in the US not just for the US Production, but also for the Canadian production. Right. For production in Mexico. So they'll produce here in the US These engines, and then they will send them to Canada where they get put in vehicles in Canada and in Mexico. So they're able to actually have an engine facility and make over a million engines because they can use that in all their production facilities across all three countries. So the scale of production is what's really important.
- [15:18]
Scott Miller
One of the things I had the hardest time convincing members of Congress was important is stability in rules. The company I worked for, like many companies, the rule was the rule. And if it stayed the same, we'd find a way to comply with it and make our operations efficient and that sometimes you could hurt more than you need help just by changing the rule too often. Now the auto industry is faced with another set of potential changes. How's that working for your members? And how do you communicate the fact that, you know, we're trying to make things together here with the United States, Canada, Mexico, and sell them to each other in the world. And having stable rules as of great value. Is anybody paying attention?
- [15:55]
Jennifer Sevassian
It's an excellent point. There is a lot of uncertainty right now, of course, on the terror front, of course, on usmca. Right. You know, we're. We're not sure how USMCA is going to be finalized again, you know, we are advocating for renewal as a trilateral. There's been a. Certainly a lot of talk about maybe won't be trilateral, maybe bilateral agreements. Right. And we, we think that that would be very harmful to the industry and the uncertainty of it. I think ultimately what it's doing is it's delaying investments. Right. I mean, for Automakers and suppliers, you know, they plan five, seven, ten years out. They don't build new facilities overnight. It takes time. And they need to make sure that their investment is going to pay off. And there's a need for that. And if there's all of this uncertainty around the rules and whether the agreement USMCA is going to continue and what it might look like, it just delays further investment because they're just not sure where to put it and if it's going to pay off.
- [16:45]
Bill Reinsch
Following up on that for a minute, CSIS Americas program has done a lengthy study last year on possible outcomes of the agreement negotiations. And Diego American was the author and he and I produced an update at the very end of March. And we concluded that there's a variety of options and you mentioned several of them, including the disaster of one or more countries pulling out. But we concluded that the most likely outcomes are two. One, renewal of a trilateral agreement with some rather significant amendments, some of which I think would impact your sector almost certainly, since that seems to be a Trump priority, but renewal. The other one would be the triggering of the 10 year process in which the agreement continues. But every year they have to go through the torture of another negotiation to see if they can reach agreement. I think Diego and I kind of parted company. I think the first alternative renewal with amendments is more likely. I think he believes the kicking the can approach is more likely. Do your members have a preference on that and how would the two options affect them?
- [17:50]
Jennifer Sevassian
Yeah, well, I mean, no question the preference is a renewal and sooner rather than later. So we have that certainty so they can plan, they can adjust to whatever is required. You know, one of the things we ask of the administration is to, to consult with us to have close consultations with the industry as they're thinking through possible changes and how they might want to change it. We can talk with them about is it feasible, you know, what does that mean in reality and all that. So we've asked for that. But there's no question renewal is what we ultimately want and we want it as soon as possible because again, that certainty is really important to the industry. You know, I think if we ended up doing a renewal every year, right, for the next 10 years or however long, right. If we can, we didn't have that conclusion. If you didn't have the renewal and the certainty and every year we continue with this review, it would be extremely disruptive to the industry because again, you know, they make these investments dependent on five to seven year time frames. And if you don't know what it's going to look like at a year or two or three or longer. It's really hard to make those decisions. So the uncertainty actually would be very, very detrimental to the industry.
- [18:52]
Scott Miller
The United States is a huge economy and allows us to the sort of the luxury of thinking about as if it's the world's biggest island and the rest of the world doesn't really matter. The fact is there are a lot of these free trade agreements. All of them include the auto sector. All of them have their own set of rules of origin for compliance. Do your members think about that as they propose changes to the rules for usmca, or are they trying to comply with both USMCA and, say, TPP for Canadian production or Mexico production, or other agreements that partners other than the United States, Canada and Mexico? How do they think about this?
- [19:31]
Jennifer Sevassian
Yeah, I mean, you're right. And they do have to comply. Right. If the rules are different, they're exporting from the United States to another country, obviously they need to make sure that they're complying with those rules. We would love as an industry to have more consolidated, standardized rules. I mean, that would make things so much easier. So, you know, I know that that is something that the administration has talked about trying to work with with other countries. Right. To kind of try to make them more consolidated with what the US Standards are. So it's a little bit easier for us to export vehicles. So we're certainly in favor of that. But, you know, so they have to think about all those things as they produce here in the US and again, we very much are in favor of producing more here in the US to export, because that, of course, means more investment here in the U.S. more American jobs here in the U.S. that's ultimately what we're going for. And I know that's what the President wants as well.
- [20:17]
Scott Miller
One of your members, BMW, in a facility in South Carolina that won all sorts of export performance awards from the Commerce Department. And they're demonstrating that every day. Yes, by making that facility not just a US Production site, but for global production and global sales.
- [20:35]
Jennifer Sevassian
Absolutely. They are a perfect example of that. They produce more in their Spartanburg facility than they sell here in the U.S. right. And that's a benefit. That's a pro. That's something we should want for all automakers.
- [20:46]
Bill Reinsch
One of the issues that was not, I think, a big factor in the 2018 negotiation was EVs and the rise of electric vehicles, which has sort of ballooned really since then. And now it's A much more significant factor. Despite everything that Trump is trying to do, it still is a significant factor in the economy and certainly it's a significant factor in the global economy. How do you see EVs being integrated into the USMCA negotiation? How does it affect supply chains and how are your members dealing with this rather significant change in market preference in a lot of countries, if not in the United States?
- [21:19]
Jennifer Sevassian
It is definitely something. I think everyone has seen the different headlines from different automakers. Right. It varies by every OEM individually and kind of what their plans were over the last couple of years and then whether they had to change that up or whatever. So it's different for everybody. But yeah, you've seen a lot of changes that have had to happen in the last couple of years because, you know, the US Consumer, right, maybe isn't, isn't all in yet on electric vehicles, but you know, we do see some of those numbers slowly increasing. So we think that there is going to be a market there. But of course, in other countries there is more of an electric vehicle market market. So again, you know, I think the OEMs are, you know, they, they're obviously producing for the U.S. market, but also, you know, looking at their global companies, so they're all looking at other markets as well. So I do think that for this upcoming review, renewal of usmca, I think that will be a bigger piece of the review and what they're, how they're going to look at it and maybe they add more, you know, to the, the core parts, that definition and what have you. We're not exactly sure. They haven't been very clear with us on kind of what they're looking to change or perhaps add to it or increase when it comes to this review that's ongoing right now thinking about, tell
- [22:26]
Bill Reinsch
me if I'm wrong, but it seems to me if you're going to have a percentage content standard for an ev, doesn't everything depend on the battery and the content of the battery?
- [22:35]
Jennifer Sevassian
Sure.
- [22:36]
Bill Reinsch
So if they insist on American batteries or North American batteries, let's be integrated for a moment. If they put in a standard that requires North American batteries, how big of a challenge is that going to be for your members?
- [22:50]
Jennifer Sevassian
Again, it's going to vary. It really does vary, dependent on the oem. Some are further along in that than others, though. It's really going to be a case by case instance for each one of them.
- [23:00]
Scott Miller
To take that a step further, there's an effort toward deregulation of the industry here in the US I Don't see a similar effort in Europe where the regulators are still focused on basically net zero goals and large scale electrification. What if you hear from your members outside of USMCA on the general environment for deregulation versus not and is the US going to be an outlier or how would they think about this?
- [23:25]
Jennifer Sevassian
Obviously they work to comply with the regulations that are out there. And you know, I think we would really prefer, you know, there being wouldn't be such significant changes, you know, with a change in administration. But obviously, you know, I think they probably felt that some of those regulation standards were too high. Right. They were going to be very difficult to meet. And I think Europe is finding that right now. I think there's an effort underway to kind of pull back a little bit on those requirements. Right. Because they're seeing the same thing that we're seeing here in the U.S. so, you know, things are constantly changing just depending on the current, you know, political situation. Again, that goes back to the. A little bit more certainty overall is always a good thing for this industry.
- [24:01]
Bill Reinsch
One of the ironies of what's going on right now, which I talked about in a previous column, is that Trump, the apostle of fossil fuels thanks to the Iran war, is actually driving people away from them more than towards them by creating a lot of uncertainty about oil supplies. So you may find some of that showing up in increased demand in the United States for EVs, you know, despite the removal of some of the incentives and were put up in the Biden administration. Before we stop, I have to ask you about China, because it's now huge element in the automobile sector in all countries. A major Exporter Certainly of EVs, but also of internal combustion engine vehicles as well. And much in the news several months ago was when Prime Minister Carney went to China and negotiated some trade deals with China, one of which included allowing 49,000 Chinese EVs into Canada. That produced a negative reaction to the surprise of nobody from the US government. How do you see that playing out? Do 49,000 EVs in Canada make any difference? How do your members feel about it? Are they going to sneak across the United States border in some way or should we be worried about this?
- [25:08]
Jennifer Sevassian
Yeah, so I mean, yes, there's no question. I think that that was a surprise to a lot of people. Right. I mean, because Canada was aligned with the US right. 100% tariffs on Chinese EVs, right. Coming into the country. And then this deal happened. And I know that there are reasons why the deal happened that I Don't need to get into. But you know, 49,000, if they actually do bring in 49,000, if they are able to sell 49,000 Chinese EVs, you know, that could be about 20 to 30% of the Canadian EV market. So that is significant. And you know, I think it could have some longer term impacts on the Canadian auto sector. Right. And investments there. They got to make sure that there's a market for them. So I think it's raising a lot of questions even within Canada. But yes, I think that there is concern about does that open the door, does it allow these vehicles into the United States? You know, keep in mind right now, again, the US has 100% over 100% tariff on Chinese EVs. You know, we've got other regulations out there that regard to connected vehicles that make it right now very difficult and possible for Chinese electric vehicles to come into the US market. So right now, you know, there are definitely steps in place to stop that from happening. So, you know, it's something that obviously everyone's watching very closely. I know, you know, given right now with the summit going on over in China, I know that this topic has been raised a lot with regard to the automotive industry. There's been a lot of articles written about it. So this is something that we're, we're keeping a very close eye on. I know it will be a big part of USMCA because the US Government certainly doesn't want Mexico or Canada to, to kind of become a backdoor for Chinese vehicles that come into the U.S.
- [26:35]
Scott Miller
jennifer, it's been great talking to you and if I could offer you the trade guys magic wand for a brief moment, if you could wave this magic wand and get one or two results for your members during the renegotiation. What are the top things?
- [26:47]
Jennifer Sevassian
So obviously a renewal I think is top one and maintain it as a trilateral agreement, I think. But also it's something that would be extremely helpful and useful to the industry right now is as this renegotiation goes on and we know it's going to take a little time, I know July 1st is the deadline, but nobody expects it to be completed by July 1st. So as the US government is working with the Mexican government, the Canadian government, and as they're kind of working through a lot of different issues, certainly automotive is not the only thing that they're working on when it comes to the review of usmca. You know, we as an industry would very much like to see what I'll call like a framework Deal right. With Mexico and Canada, like, like the government has done with other countries. Because right now you're looking at 25% tariffs still on Mexico and Canada. And we would really like to see those lowered because that would be very beneficial to the industry. I mean, right now there's certainly, you know, are some carve outs right now. If you have a vehicle that is compliant with usmca, you don't get tariffed on the US content of that. And parts that are compliant are not tariff. But there's still a lot of other pieces, right, because keep in mind USMCA was be a North American agreement. And so to meet those requirements, it was North America, it wasn't us. So it is still having an impact on the industry. So I think we would, as they work through this process if they could certainly again, the magic wand, right. If they could kind of, you know, work on it, deal with each country and lower that 25% tariff and lower certainly the tariffs on steel and aluminum, that would be fantastic for us. You know, overall, I will tell you the biggest thing for my members is making sure that, you know, it continues because USMCA is not only important overall for the industry, but it's also important to provide US consumers with affordable vehicles. And we're able to do that through usmc. So there's a lot of benefits to the US market to keep this going.
- [28:28]
Bill Reinsch
So Scott, do we have a magic wand? This is cool. I didn't know that.
- [28:31]
Scott Miller
We just created it like we do everything else on this show.
- [28:34]
Jennifer Sevassian
I like it though.
- [28:35]
Bill Reinsch
We'll waive it on your behalf.
- [28:36]
Jennifer Sevassian
Please.
- [28:37]
Scott Miller
Bill, go ahead, get the last question.
- [28:39]
Bill Reinsch
I think we're in good shape. You said something though that intrigued me because I've been sort of assuming that the way the current agreement reads, they're supposed to make a decision on July 1 that either renew or not to renew. And if they don't renew, then this 10 year thing goes into effect. I don't see latitude in there. Now I suspect if it were July 2nd, 3rd or 4th, nobody's going to complain. But you're implying that it might be September or October or something like that. Is that a possibility, you think, within the terms of the agreement, doesn't somebody pull the plug?
- [29:10]
Jennifer Sevassian
I think what they'll do on July 1st is say they're still talking. Right. And no decision's been made. So I think that automatically start continues this annual review, but I don't think they wait till next year. Right. I think these talks continue and again we hope that they find A resolution as quickly as possible so that we don't have to wait till next July 1 to hear from them again, that this is an ongoing process. And I do think it will be.
- [29:30]
Bill Reinsch
Yeah, that's a sort of a new variable that I hadn't thought about when we talked about this in the past. It seemed to me that the politics of this dictate renewal. And I think the President's political advisors, not his trade advisors, are going to tell him the worst thing you can do three months before an election is torpedo this agreement because you're going to create massive disruptions in all three economies, maybe bigger ones in the other two, but certainly a big one here, disruption in the marketplace, even more of the uncertainty that you talked about. Big mistake. That's the reason why I kind of asked the question about if they trigger the 10 year process, because Trump's thinking might be, well, if we just kick the can until 2027, when there's no election, I can get a better deal then because I don't have to worry about politics of it. But what you really have said is that the uncertainty would be significant even in that situation. But then you have suggested really kind of a third alternative, which is they just keep talking beyond July 1, and then we have a September or October surprise right before the election where Trump can say, I've done it again, I've created this wonderful deal and there won't be time. You'll actually study it to figure out if it's any good or not, and there'll be a huge victory for him. So that seems to be, in your mind, is one of the possibilities here?
- [30:40]
Jennifer Sevassian
Yes, well, I, I mean, who knows when, right? I mean, again, we're urging for this to be resolved as soon as possible, but yes, it could be, it could go through this year, it could be early next year. I mean, it is impossible to know. But I do believe that they will continue talking with both countries. You know, they've got a bunch of things that they're working on that are even outside usmca. And I think that they're, you know, they're using USMCA as a way to also continue with those other factors as well. So it's impossible to know when, again, we are advocating that be done as soon as possible. And I would say, you know, we're not doing this alone with the entire US Auto industry. So we're working closely with the Detroit automakers, the suppliers, the dealers. Right. We are all united on this front that we want USMCA to be renewed as a trilateral agreement, and we want to return to preferential treatment when he does get renewed. So that is the goal of all of us.
- [31:27]
Scott Miller
Jennifer, thanks so much for being a part of the show, and we've really learned a lot from you. I know our listeners will appreciate you coming on the program and giving us your time and your ideas and knowledge. So thanks for joining us, and we'll follow this closely.
- [31:39]
Jennifer Sevassian
Wonderful. Thank you both for having me.
- [31:41]
Bill Reinsch
Thank you. And next week, we'll be having the Business Roundtable, raising some of the same issues, but also more broadly, talking about the other parts of the USMCA as well.
- [31:51]
Jennifer Sevassian
Foreign
- [31:55]
Bill Reinsch
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