Background and Relevance of the Individual Mentioned
The individual mentioned in this context is Robert Lighthizer, who served as the United States Trade Representative under the Trump administration. He played a pivotal role in negotiating the United States-Mexico-Canada Agreement (T-MEC) in 2018.
The T-MEC and Parallel Agreement
In the context of the T-MEC, a parallel agreement was signed on November 30, 2018. This document, led by Lighthizer, guaranteed preferential treatment for Mexico in cases where U.S. customs imposed tariffs under Section 232 of the Trade Expansion Act of 1962.
Key Commitments in the Parallel Agreement
- Tariff Exclusion: The U.S. committed not to impose tariffs on up to 2.6 million passenger cars and up to $108 billion worth of automotive parts annually, should it decide to levy tariffs for national security reasons.
- Preferential Treatment: The agreement ensures that Mexican-origin vehicles and parts meeting T-MEC rules of origin receive free trade status under the T-MEC or the U.S.’s most favored nation (MFN) tariff rate applicable as of August 1, 2018.
Tariffs and Their Impact
Since April 3, 2025, the U.S. has imposed a 25% tariff on all imported vehicles, except for the U.S.-content in vehicles imported from Mexico or Canada.
Mexican Exports and Tariff Implications
In 2024, Mexico exported 2.972 million vehicles and $181.397 billion worth of automotive parts to the U.S., falling under the categories listed in Proclamation 10908 of March 26, 2025. This proclamation imposed a 25% tariff on U.S. imports of cars originating from all countries worldwide.
Secretary Ebrard’s Statement
Marcelo Ebrard, Mexico’s Secretary of Economy, commented on the situation, stating that vehicles subject to tariffs would receive discounts based on model and regional content.
Section 232 and Its Application
The U.S. can invoke Section 232 of the Trade Expansion Act of 1962 if it believes that importing certain products threatens the national security of the country.
Complementary Agreements
The U.S. signed complementary letters with Canada and Mexico, stipulating that certain quantities of vehicles and automotive parts would be excluded from potential Section 232 tariffs.
Exclusion Details
- Vehicle Categories: The exclusions cover passenger cars (subheadings 8703.21 to 8703.90), light trucks (subheadings 8704.21 and 8704.31), and any automotive parts within the scope of this measure.
- No Tariff Implementation for 60 Days: The U.S. agreed not to adopt or maintain any tariff or restriction measure on the importation of these goods from Mexico for at least 60 days following its implementation.
- Post-60 Days Exclusions: After the 60-day period, the U.S. would exclude from tariffs: 2.6 million passenger cars imported annually from Mexico, light trucks imported from Mexico, and automotive parts valued at $108 billion annually in U.S. customs declared value.
Tariff Preferential Treatment and MFN Tariff Rate
Excluded goods would be eligible for preferential tariff treatment under the North American Free Trade Agreement (NAFTA) or T-MEC, should they meet origin requirements. If the goods do not qualify as originating, the U.S. customs tariff applied would not exceed the MFN tariff rate in effect as of August 1, 2018.
