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Under pressure from business groups, including the Alliance for Automotive Innovation (the newly merged Auto Alliance representing U.S. automakers and Association of Global Automakers), the Trump Administration has pushed implementation of the U.S.-Mexico-Canada Agreement (USMCA) one month to July 1, 2020.

A replacement for the North American Free Trade Agreement (NAFTA), the USMCA has several automotive-specific requirements including the need to pay workers at least $16 per hour to win tariff-free trading rights, a rate that few manufacturers in Mexico meet. The deal was supposed to go into effect on June 1, 2020, but automotive and other manufacturing executives asked for a delay as they struggled to manage the COVID-19 pandemic.

In late April, U.S. Trade Representative (USTR) Robert Lighthizer notified Congress that Canada and Mexico have taken measures necessary to comply with the USMCA, the last formal step needed before implementation in July.

“The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America,” Lighthizer says in his letter to Congress. “The USMCA’s entry into force is a landmark achievement in that effort.;