On December 2, 2018, Mr. Trump announced that he would begin the 6-month process of exiting NAFTA, adding that Congress must either ratify the USMCA or return to trade rules before NAFTA. Scientists are debating whether the president can unilaterally withdraw from the pact without congressional approval.  Mexico`s proximity to the United States and Canada has created an extensive North American logistics hub that allows easy access and access to goods for all three countries. The North American Free Trade Agreement (NAFTA) boosts trade between the three countries by removing tariffs on products with a 60% rule of origin in North America. Mexico`s best exports to the United States and Canada are automobiles, auto parts, and electronics. These exports are due to two- and three-way trade, where more than half of the materials used in the products come from a NAFTA country. This form of trade has increased the GDP rates of the three countries over the past 23 years. After its ratification, with a few exceptions, the free trade agreement eliminated almost all tariffs on industrial goods. Woolly products, for example, continue to be subject to tariff quotas, while some agricultural products benefit from lower customs limits.
For motor goods, a separate supplementary economic agreement is provided. The text of the agreement was signed on 30 November 2018 by the Heads of State and Government of the three countries as a secondary event to the G20 Summit to be held in Buenos Aires, Argentina, on 30 November 2018. Sectors such as automotive manufacturing require significant investments in cross-border supply chains.  Given the predominance of the consumer market in the United States, it is likely that this will put pressure on companies to install more production in the United States, with a greater likelihood of increasing the costs of producing these vehicles.  The United States, Mexico and Canada have agreed on non-discrimination and transparency obligations with respect to sales and distribution, as well as labelling and certification provisions, to avoid technical barriers to trade in wines and spirits. They agreed to continue to recognize Bourbon Whiskey, Tennessee Whiskey, Tequila, Mezcal and Canadian Whisky as distinctive products.