Study: NAFTA Collapse Could Cost U.S. 50,000 Supplier Jobs

The U.S. auto industry could lose as many as 50,000 jobs at supplier companies if the North American Free Trade Agreement collapses, according to an analysis by the Boston Consulting Group.

The report updates a study Boston Consulting released in July that concluded leaving NAFTA and imposing border taxes on Mexican imports would cost the U.S. auto industry $22 billion per year and eliminate 20,000-45,000 supplier jobs. Both studies were commissioned by the Motor Equipment Manufacturers Assn.

The Trump administration called for a review of NAFTA in hopes to luring more supplier and vehicle assembly jobs back to the U.S. from Mexico. But President Trump also has declared he will abandon the 23-year-old agreement unless it can be modified to reduce America’s $56 billion trade deficit with Mexico. Last year’s trade deficit with Canada, the third member of the trade pact, was $12 billion.

Boston Consulting said in July that higher tariffs resulting from new, post-NAFTA U.S. border taxes would offset the benefits of exporting by nearly three to one.