USMCA Impacts on Michigan Industry

07/20/20

Is your supply chain impacted by USMCA that went into effect on July 1st?

APICS Greater Detroit serves local supply chain professionals by providing knowledge and education needed to compete in today’s world. USMCA replaced NAFTA and went into effect on July 1st.

Per Mark A. Morgan, the acting commissioner of U.S. Customs and Border Protection, enforcing USMCA means prosperity for Michigan. Read more below.

Mr. Morgan shared his thoughts recently with the Detroit News and stated, “The International Trade Commission estimates that the USCMA will generate between 176,000 and 589,000 new American jobs. Importantly for Michigan, no sector of the economy stands to benefit from the USMCA more than the U.S. automotive industry. The USMCA is projected to generate an estimated $34 billion in new automotive manufacturing investments and 76,000 automotive industry jobs in the United States over the next five years.”

He continues to state the USMCA will benefit Michigan industry by:

Requiring 75% of a car’s value be produced in North America.
Preventing the outsourcing of American automotive industry jobs by mandating that a set percentage of each vehicle is produced in factories that pay an average wage of at least $16 (USD) per hour.
Expands customs authorities to protect human and agricultural health and ends certain Canadian restrictions on American dairy exports, wheat and wine products helping Michigan farmers and vintners.
Strengthens prohibitions on the importation of goods produced using forced labor into Canada, Mexico and the United States, and encourages the three countries to cooperate on related enforcement efforts, improving ability to combat human trafficking and leveling playing field for U.S. manufacturers.

Per the National Association for Manufacturers (NAM), trade is important for Michigan, helping Michiganders sell more of what they make to more customers around the world. They produced a USMCA Michigan Fact Sheet on trade that shared one out of three Michigan manufacturing firms export to Canada and Mexico including 3,875 firms with 84 percent being small- and medium-sized businesses supporting local economies.

NAM also stated that Michigan’s top exports to Canada and Mexico include: motor vehicle parts; motor vehicles; motor vehicle bodies and trailers; chemicals; fabricated metal products; iron and steel; electrical equipment and components; other machinery; plastics; engine, turbine and power transmission equipment. Plus Michigan’s manufacturers rely on North America: Canada and Mexico as big purchasers of Michigan goods, purchasing substantial portions of Michigan’s foreign sales of major manufactured goods, supporting well-paying jobs in communities across Michigan. For example, in 2018, per the U.S. Department of Commerce, Michigan exported $55 Billion of manufactured goods to the world and $34 Billion or over 60% was to Canada and Mexico.

Looking for more information on the USMCA? The U.S. Customs and Border Protection has established the USMCA Center to serve as one-stop shop for information concerning implementation efforts.