NAFTA on the ballot, and now on the table

If 2012 was a referendum on the auto bailout, 2016 proved to be a referendum on NAFTA, a pact that has been generally good for the security of the U.S. auto industry, but not so much for the people who used to work in it.

Who knew free-trade resentments would be such a potent political force?

Michael Moore did.

In a prescient pre-election essay, the liberal filmmaker and political provocateur predicted a victory for Donald Trump, citing his keen focus on four industrial states hammered by manufacturing job losses: Pennsylvania, Michigan, Ohio and Wisconsin. In 2012, President Barack Obama won all four. This time, Trump had the sweep.

"When Trump stood in the shadow of a Ford Motor Co. factory during the Michigan primary, he threatened the corporation that if they did indeed go ahead with their planned closure of that factory and move it to Mexico, he would slap a 35 percent tariff on Mexican-built cars shipped back to the United States," Moore wrote. "It was sweet music to the ears of the working class in Michigan."

The plant was never in danger of closing or moving to Mexico. But the message carried, and it carried Michigan for Trump.

Once he's in office, what will Trump actually do? How much can he do? "A lot," said Mark Muro, senior fellow at the Brookings Institution think tank.

"It's hard to expand trade deals," Muro said. "That requires congressional action and cooperation, but limiting trade is something a president can do relatively easily. He can impose tariffs right away."

Both Trump and Hillary Clinton had pledged to renegotiate the North American Free Trade Agreement (which Bill Clinton signed), but the president-elect could go further. "He could withdraw the U.S.," Muro said. "He could revert to a kind of bilateral Canada-only pact. Auto industry executives are not wrong to be concerned about uncertainty and disruption."

"There's a lot at stake for the auto industry, manufacturing and the economy,"said Joseph Parilla, another Brookings fellow. "If he were to announce on Inauguration Day we will pull out of NAFTA, it would require six months. What happens next is a little uncertain. We have not in the modern era pulled out of trade agreements."