The agreements struck this week between the U.S. and Mexico on trade would allow President Donald Trump to impose punitive “national security” tariffs of up to 25 percent on imports of Mexican-made cars, sport utility vehicles and auto parts above certain volumes, auto executives and other sources said.
A previously unreported side agreement between the two countries would allow the U.S. to pursue national security tariffs on annual Mexican car and SUV imports of over 2.4 million vehicles, a number that significantly exceeds last year’s total imports. The side deal would allow national security levies on auto parts imports above a value of $90 billion per year on the same grounds.
Mexican Economy Minister Ildefonso Guajardo said on Wednesday the “side letter” protected Mexico’s auto industry and gave it scope to grow before facing any potential national security tariffs.
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