Beijing time on Thursday (August 30), according to Reuters, according to the US-Mexico trade agreement reached on August 27, US President Trump will be allowed to excuse "national security" and make cars and sports for Mexico. Multi-purpose vehicles (SUVs) and auto parts are subject to a punitive tariff of up to 25%.
The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA) and pressure Canada to accept new auto trade and dispute settlement rules to maintain a tripartite agreement.
A non-announced agreement between the two countries will allow the United States to impose a 25% national security tariff on cars and SUVs imported from Mexico that exceed quotas. The size of the quota is 2.4 million, which is far more than last year's total imports. In 2017, nearly 1.8 million cars and SUVs were exported from Mexico to the United States. At the same time, the United States will be able to impose the same tariff on more than $90 billion in auto parts imported from Mexico.
Mexican Economy Minister Ildefonso Guajardo said on Wednesday that the "bilateral agreement" protected the Mexican auto industry and gave the Mexican auto industry room to develop before facing any potential national security tariffs.