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How Trade is Done: USMCA Brings 'Renaissance in US Battery Production'

October 5, 2021

Hailing the progress of the Trump administration's United States-Mexico-Canada Agreement (USMCA), former U.S. Trade Representative Robert Lighthizer noted a "renaissance in U.S. battery production" for the auto industry.

"Until recently, U.S. auto companies sourced nearly all of their batteries overseas," Lighthizer said in a statement published from former President Donald Trump's Save America PAC on Monday night. "USMCA changed that."

Under the agreement, Lighthizer said, an automobile cannot qualify for duty-free treatment unless 40% of the content (45% for a truck) is manufactured by workers earning at least $16 per hour.

"Advanced batteries of the kind that will power new energy vehicles comprise such a high percentage of the value of these vehicles that it will be almost impossible for auto companies to qualify them under the agreement without sourcing the batteries in the United States," Lighthizer continued.

"And in order to take advantage of a longer transition time available under the agreement, most auto companies have committed to qualifying their entire North American fleet — regardless of where the vehicles are manufactured and traded."

Lighthizer pointed to SK Innovation's new $2.6 billion facility in Georgia and SK and Ford announcing an $11 billion investment in Tennessee and Kentucky.

"The result we are seeing is a renaissance in U.S. battery production," Lighthizer said.

"Without USMCA — and the Trump administration's strong actions to push back against China's unfair trade practices — this new investment and the thousands of good paying jobs that go with it would have gone to China or other low wage jurisdictions," he concluded.

"Worker-focused trade policy works for America. More of America's cars of the future will be built right here."



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