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This is a 1993 Chevy Suburban And this is a 2018 Chevy Suburban The 1993 one cost 21000 brand new and 2018one costs 47000 But if we adjust the price for inflation the 1993 Suburban would cost 42000 today Even though the 2018 model comes with modern features like a back-up camera remote engine start and ya know — airbag— — the cost hasntchanged much in 25 years It's not just the Suburban the average price of new cars has risen only 7 since the early '90s While the price for almost all other goods has increased by 86 And that is thanks to NAFTA The nations of North America are ready Strengthened by the explosion of growth and trade To recognize that there is no turning back from the world of today and tomorrow When the North American Free Trade Agreement took effect in 1994 it was the first major trade deal of its kind The US Canada and Mexico agreed to eliminate tariffs which are taxes on most imported and exported goods The countries hoped it would increase investment sand that by strengthening Mexico's economy it would slow illegal immigration The trade agreement benefited the auto industry in particular It allowed automakers to keep costs down because cars and auto parts could be traded for free Well for the most part If at least 625 of a cars parts we resourced from North America it would be tariff-free Cars that didn't meet the requirement or were made overseas would be slapped with a 25 tariff NAFTA also gave automakers the ability to source cars where costs were the lowest By comparison a car made in Mexico costs1200 less than one built in the US because labor and the parts are cheaper As an industry we've kind of performed some economic miracles when it comes to keeping cars affordable by being able to source some of those 30000 parts from you know the least expensive places Lets take this model of a 2014 Ford Mustang for example Its engine was built in the US, but its manual transmission came from Mexico It's impossible for a consumer to easily find out where each individual part came from, but it's likely the doors were molded in Canada The speedometer came from Germany or China which was assembled in the US but then sent to Canada to be installed into the dashboard The seatbelts did come from a company in Japan But the seats were probably made in Mexico The tires most likely came from South Korea In the end the 2014 Mustang was built in Detroit but with only 65 of its total parts sourced from North America It made the tariff cut And Ford is in no way the only company who does this About three-quarters of the cars sold in thus meet the standards to avoid tariffs including most cars produced by the top four auto brands The US is actually producing more cars now than before NAFTA Same for Mexico and Canada But you wouldn't know that if you listened to politicians NAFTA was a mistake The single worst trade deal ever made by any country anywhere in the world Instead of creating jobs NAFTA cost us jobs In the auto industry alone a third of...
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