North America's Shifting Supply Chains: The USMCA, COVID-19, and the U.S.-China Trade War [open pdf - 3MB]
From the Introduction: "The United States-Canada-Mexico Agreement (USMCA) entered into force on July 1, 2020, after a long and arduous journey that began in 2017 with multiple U.S. threats to terminate the North American Free Trade Agreement (NAFTA). Its journey effectively ended when the Trump administration and the Democratic Congress agreed in December 2019 on a series of amendments to the original text signed on November 30, 2018. [...] These provisions in themselves will require significant modifications to the supply chains utilized by the dozens of auto plants operating in North America. [...] Simultaneously, several other factors are forcing North American manufacturers, including but not limited to those in the automotive industry, to radically adjust their supply chains, creating a veritable 'perfect storm' of pressures to decouple with China (and reduce dependence on other non-North American sources) for materials and components. [...] Part II briefly describes the pressures on enterprises producing goods in North America to move materials and component sourcing to North America from China because of the U.S.-China trade war. Part III reflects on the additional pressures that national security concerns are placing on the sourcing of Chinese parts and components. [...] Part IV discusses similar pressures arising out of the USMCA. [...] Part V addresses related pressures resulting from both COVID-19 [coronavirus disease 2019] and carbon footprint concerns to reduce or eliminate long supply lines, particularly regarding medical equipment, pharmaceutical products, and personal protective equipment. Part VI provides a short conclusion and predictions for the future."
2020 Rice University's Baker Institute for Public Policy. Posted here with permission. Documents are for personal use only and not for commercial profit.
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