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The new U.S. -Mexico-Canada trade agreement will retain U.S. President Trump's ability to impose a 25% tariff threat on imported vehicles, while basically exempting passenger cars, pickups and auto parts imported from Canada and Mexico from tariffs, according to the trade agreement's subsidiary arrangement announced Monday.
If Trump imposes so-called Chapter 232 tariffs on cars for national security reasons, Mexico and Canada will have a quota of 2.6 million passenger cars exported to the United States each year exempted from tax.
Under the subsidiary arrangement, the pickup produced in the two countries will be fully exempted from customs duties.
If Trump imposes auto tariffs, Mexico will receive a $108 billion annual exemption quota for auto parts and Canada a $32.4 billion quota. These two quotas are far higher than those of the two countries, which provide room for growth for the two countries' exports.


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