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70% American Parts, 25% Tariff: The Paradox of “American-Made” Vehicles

The definition of what constitutes an “American-made” vehicle is increasingly ambiguous. For instance, the Toyota RAV4, assembled in Canada, contains 70% American parts. Despite this high percentage of American components, it would still be subject to a 25% tariff because it’s technically an import. Conversely, some vehicles labeled as imports might actually use a majority of American-made parts. This discrepancy highlights a significant issue in the automotive industry where the origin of parts does not always align with the assembly location or the brand’s nationality. This situation raises questions about the fairness and effectiveness of tariffs based on assembly location rather than the origin of the parts used in manufacturing.

Source: flowingdata.com

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