Passenger vehicles, light trucks, and associated parts imported to the US are subject to additional taxes, unless certain percentages of the product are produced in a NAFTA country (US, Mexico, or Canada). The thresholds for being exempt are increasing from as low as 62% to as high as 85% in 2023. This means our favorite vehicles from Europe, UK, and Japan are going to be getting more expensive.
These percentages, called Regional Value Content (RVC), were originally outlined in NAFTA and updated by USMCA. RVC is calculated a few different ways, and it’s a bit confusing to this gearhead what the impact to my wallet will be. You can read about Regional Value Content in Article 4 of USMCA, and if you’re really ambitious you can read the entire text of USMCA here.
So how will this effect your vehicle fun budget for 2023 and beyond? For a quick reference, check out the chart below from Zeihan on Geopolitics. The accompanying video from Peter is worth a watch as well.
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Dan is a DIY zealot and autodidact. Real science, pseudoprofessional.
