The US Senateoverwhelminglypassed the USMCA trade deal. Once implemented, this will replace (modify) the current NAFTA trade agreement. One of the provisions of the deal requires Mexico to pay similar wages to that of the US workers for any export oriented goods to the US. Please, read the following paragraphs:

"USMCA requires that 75% of an automobile's parts must be made in North America to be duty-free, up from 62.5%. In addition, the deal says that at least 40% to 45% of a car's components must be made by factory workers earning at least $16 an hour or its equivalent. The measures are meant to limit Mexico's competitive advantage on labor costs but will increase the cost of making cars."*

"USMCA terminates free trade in cars and auto parts. To avoid new tariffs, the Mexican auto sector would have to comply with onerous new content requirements (country rules of origin) and pay wages far above prevailing Mexican rates. These provisions, by design, would make Mexican factories uncompetitive. They would also raise car prices, shrink North American auto exports and eventually reduce U.S. auto employment."**

This would hurt American consumers, as prices of car will go up. However, this would be beneficial to US autoworkers. Additionally, it will help to reduce trade deficit, as many foreign automakers might eventually move back to the USA if there is no cost advantage of manufacturing cars in countries, such as Mexico. In this situation, it's a trade-off between consumers versus workers.

Question to answer:

Discuss whether the United States will be betteror worse off in the long run as a result of this trade deal. You should incorporate the following as part of you analysis.

1. consumers
2. Auto-workers
3. Trade deficit

*Source:Washington Examiner.Biggest benefit of Trump USMCA Trade Deal

** Source:WSJ website: I will vote against this antitrade agreement