In December 1992, Canadian Prime Minister Brian Mulroney, Mexican President Carlos Salinas de Gortari, and the U.S. President George H.W. Bush signed the North American Free Trade Agreement (NAFTA). The agreement came into force in 1994. One of the major accomplishments of the agreement was the eradication of tariffs between the three participating countries on nearly all qualifying goods by the year 2003.

In October 2017, the Trump administration pushed for an amendment to the NAFTA agreement, specifically to the rules regarding items with “Made in America” stamps. Leaders of the Detroit Three automakers recently met with Mike Pence to discuss their concerns over the proposed amendments.

According to the current NAFTA requirements, 70% of the total cost of manufacturing the product must come from Mexico, the United States or Canada. Also, 62.5% of parts currently must be made in one of the above listed countries to avoid hefty tariffs. The United States is hoping to increase the percentage of parts being made in one of the participating countries to 85%, which will make it the highest requirement of any trading bloc. In addition, it is proposing that 50% of auto contents come from the United States.

The reason for the proposed changes is Donald J. Trump’s desire to protect jobs for Americans and avoid losing employment to overseas factories. According to, the Trump administration also desires to reduce the trade deficit by having the country export more than it imports. At the moment, the United States’ trade surplus with Canada stands at $12.5 billion, which is small and not worrisome. The big issue lies with Mexico, who the US had a $59 billion trade deficit with in 2016.

Both Canada and Mexico have rejected these proposed changes.

NAFTA Renegotiations and the Auto Industry

The auto industry is one of the biggest industries affected by the new proposals made by the Trump Administration. Canada, the United States and Mexico have enjoyed the free movement of auto parts for over 25 years, and the proximity of the Detroit Three (General Motors, Fiat-Chrysler, and Ford) to Windsor, Ontario, could make Michigan economically vulnerable in this sector. This has left manufacturers and auto unions pushing back to avoid the prospect of higher tariffs. To underscore the point, Jennifer Thomas, vice president of federal affairs at the Alliance of Automobile Manufacturers, said in a statement, “Pulling out of NAFTA would lead to a decrease in vehicle production, a decline in jobs and an increase in what our customers spend when buying a new vehicle. Not to mention this would also have an impact on our abilities to export vehicles to foreign markets.”

A356.2 Substitute – ECCOMELT356.2: MADE in AMERICA

Whatever the outcome of this trade policy disagreement between the U.S., Canada, and Mexico, Eccomelt LLC has always, and will continue to meet the NAFTA compliance requirements. At its U.S. facility, located in Manchester, Georgia, Eccomelt buys all American parts and produces a shred that is “Made in America”, an entirely domestic product. At our Canadian plant, located in Toronto, Canada, 100% of our feedstock originates from auto dismantlers in the U.S. and Canada. Even if the new proposed levels of 85% comes into place, the fact remains the same: our raw material is sourced entirely from Canada and the United States, thereby fulfilling the Trump administration’s requirements in their entirety.

Discover Eccomelt Quality – Uncover Unmatched Quality

Eccomelt is a division of House of Metals Co. Ltd., founded in 1953 and has achieved recognition as being one of Canada’s best-known aluminum processors.

Alongside Alcan R&D, we have developed an eco-friendly substitute for A356.2 from aluminum wheels. Our product is the material of choice for many consumers because it is chemically pure and environmentally-friendly. Its shredded form has achieved higher melting rates than Ingot, Sow or T-Bar. Environmental testing has also proven the process eliminates all coatings.

Our customer support specialists would be delighted to speak to you about your aluminum alloy needs. For more information about our products, please visit our about us page. Alternatively, feel free to contact us at (888) 356-9557 for more information on our Eccomelt356.2 product.


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