Billionaire Anand Mahindra, the third-generation head of his family’s Mumbai-based conglomerate, told CNBC on Monday in which he does not believe the U.S. will pull out of the North American Free Trade Agreement, despite tough talk by President Donald Trump.
With global operations, including business interests inside U.S., Mexico in addition to Canada, the chairman of Mahindra & Mahindra said, “I think your president will be the consummate negotiator. He’s firing an opening shot. although I think he’s just as aware of how integrated NAFTA will be.”
“I don’t necessarily share anyone’s pessimism in which America might bail out entirely,” said Mahindra, whose company on Monday opened a brand-new factory in Michigan to make off-road utility vehicles. in which plans to hire 250 Americans workers inside next few months, in addition to 400 more by 2020.
Mahindra said he does not see any major disruptions inside supply chain as a result of tweaks to NAFTA. “What the cost impacts will be may be a different matter.” Mahindra & Mahindra’s seven major divisions are automotive, farm equipment, in which, financial services, steel, infrastructure, in addition to hospitality.
Negotiations to update the 23-year-old trade agreement continue to run into roadblocks over major issues such as autos rules of origin, which could put the NAFTA talks in danger of stalemating, with an early 2018 deadline for revising the pact approaching.
In a CNBC appearance in September, Commerce Secretary Wilbur Ross said autos in addition to auto parts are a key area in overhauling NAFTA. “The sharp growth will be parts coming in by outside NAFTA, by China, by Southeast Asia,” he said at the time, stressing a free trade zone will be supposed to benefit the principals, not outside nations.
Despite the sticking points, Mahindra told “Squawk on the Street” on Monday in which he remains hopeful. “I’m an optimist about NAFTA merely being updated. although I don’t think in which’s going to be a situation where NAFTA will be going to explode.”
— CNBC’s Michelle Caruso-Cabrera contributed to This particular report.