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Aug

20

Clarification on Tariffs for Car Imports from Mexico and China

In a recent article, Connor Pfeiffer suggests the possibility of China exporting cheap cars to the U.S. from Mexico by exploiting supposed "gaps" in USMCA rules. However, the 2.5% tariff rate he refers to is standard for cars from countries without free trade agreements. It's worth noting that, although Chinese cars are also subject to this rate, they face an additional 25% tariff.

Within the context of the U.S. tariff code, there are three main rates for most imports: a "general" most-favored-nation rate, a "special" rate, and a "column 2" rate. The 2.5% rate Pfeiffer mentions is the U.S. "general" rate for cars, applying to any car exported from countries without free trade agreements. Since the U.S. established permanent normal trade relations with China in 2000, this rate also applies to cars exported from there.

 
While the idea of exporting Chinese cars through Mexico may seem appealing, Chinese cars face an additional 25% tariff imposed by the Trump administration. Therefore, the 2.5% rate Pfeiffer mentions is simply the standard rate for countries without free trade agreements with the U.S., and is not specifically related to the USMCA or exports from Mexico.
 
Retrieved from: 
 
Wall Street Journal, (2024). Targeting Tariffs on Chinese Cars Isn’t Easy for Mexico. Recuperado de https://www.wsj.com/articles/targeting-tariffs-on-chinese-cars-isnt-easy-mexico-electric-1316dbaf#=