EsPresident Donald Trump will visit a Dana Inc. factory in Michigan on Jan. 30 to promote the U.S.-Mexico-Canada Agreement. That will follow the President’s signing of the USMCA enacting legislation on Jan. 29, Associated Press reports.
While the President’s signature wraps up the formal passage in the U.S., USMCA cannot come into force until it is passed by Canada’s Parliament, as flagged in Panjiva’s research of Jan. 13. The opposition Conservatives may delay that process – the Liberal Party runs a minority government – though there’s few doubts it will block USMCA’s passage.
Once passed, auto components makers such as Dana can start to implement new supply chain plans. One of the major features of USMCA are changes regarding rules of origin for automotive components.
Dana’s reliance on imports has been expanding rapidly. Panjiva data shows U.S. seaborne imports linked to the firm jumped 36.1% higher year over year in 4Q. That includes a wide range of shipments of power train, sealants and heat management parts. Notably though there’s been a decline in shipments of axles offset by increases for specialist components outside the automotive space.
The increase comes after Dana’s North American sales climbed 11.3% year over year in 3Q – the last report data – though those results included net income that was below analysts’ expectations, S&P Global Market Intelligence data shows.
Source: Panjiva
The largest contributor to Dana’s imports from outside the USMCA area was India with 26.0% of shipments in 2019 after a 57.5% surge in 4Q. A potential trade deal between the U.S. and India could maintain the competitiveness of those shipments, though progress in signing a deal appears to be slow.
Second was Thailand which represented 23.3% of the total after a 4Q jump of 74.5%. The Thai government may look to sign a trade deal of some sort in order to continue to regain access to the Generalized System of Preferences reduced tariffs. Yet, the Trump administration may as likely launch a new round of tariffs as it seeks to cut total U.S. imports.
Imports from Europe represented 23.0% of shipments linked to Dana after a more modest 15.8% rise in 4Q. Those imports may be most at threat from the Trump administration’s trade policies. The President has threatened to apply tariffs to automotive imports should a trade deal between the EU and U.S. not arrive in short order, while a dispute over carbon border taxes looms.
Source: Panjiva
