Automotive groups ask Congress to delay USMCA as part of economic stimulus package

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American automotive industry groups are asking Congress to consider delaying United States-Mexico-Canada Agreement (USMCA) policies as part of its COVID-19 economic stimulus package.

In a letter to the Trump White House and both houses of Congress, the Alliance for Automotive Innovation, the National Automobile Dealers Association (NADA) and the Motor & Equipment Manufacturers Association (MEMA) asked government officials to work quickly to pass a stimulus package in order to save the 10 million jobs and $2 trillion economic impact auto manufacturing, sales and service has on the American economy.

The groups asked for the delay of USMCA implementation which is scheduled to go into effect on June 1. Implementation of the USMCA would require automakers to ensure that 40 percent of their motor vehicles are made in facilities where assembly workers earn at least $16 per hour. While U.S. and Canadian auto assembly workers typically make much more than that, Mexican workers do not – a fact many U.S. automakers have taken advantage of to lower costs.

The groups also asked for the robust creation of credit facilities, tax deductions for companies with more than 500 employees who provide paid leave, delayed or deferred quarterly tax payments, and expanded expensing for machinery and equipment.

“Stalling sales and halted production threatens a vast network of businesses in every state, which is why Congress and the Administration must take important steps to pass a robust economic stimulus package that can assist businesses large and small as they work to confront the challenges that they face due to events beyond their control,” said the organizations’ leaders John Bozella, Peter Welch and Bill Long.

Auto industry analysts say the coronavirus pandemic will lead to a 40 percent loss of auto sales compared to the same time last year. That decrease, analysts said, would not only negatively impact the auto industry, but the U.S. economy overall.

“Enacting these policies in the immediate term would help moderate the impact of the economic situation our nation faces which will assist businesses and workers as we work to get various parts of our economy moving again in the coming weeks and months,” the Alliance, NADA and MEMA said in its letter.