They too must meet a minimum level of North American content to avoid tariffs. So if a hypothetical car were to be put together in Detroit but all the parts in it were built in Asia, the car would not meet the North American content minimum and would be subjected to the tariff. For auto parts themselves, the minimum is 60 per cent North American content. Early in the talks, the Trump administration proposed to raise the minimum North American content way up to 85 per cent. And Canada has made a proposal involving a formula for allowing engineering and research to be counted toward the North American minimum.

Source: thestar May 02, 2018 03:56 UTC