New trade deal

Today the new trade agreement between the US, Canada and Mexico is signed and goes into effect January 1st, 2019. The primary beneficiaries of the agreement are labor unions, U.S. dairy farmers, U.S. drug manufacturers, and companies that provide automation for manufacturers (e.g., robot makers). The agreement specifies that Mexicans working in the auto plant be paid higher wages. Thirty percent must receive $16 per hour rising to 40% in five years, (today they are paid $5 per hour). It also says that 70% of parts of imported cars must be made in North America which eliminates some parts made in China and shipped to Mexico. This removes some of the cheap steel that China dumps on the world market. Since imported cars will cost more to manufacture so US consumers will pay more for the cars.