ccording to the report of FT, the new North American free-trade agreement (NAFTA) that came into effect on July 1, 2020 requires 40% or more of parts for each passenger vehicle to be manufactured by workers who are paid at least $16 an hour as a condition to make them tariff-free in the region. Mr. Trump hailed that feature as a way to boost production in the US, which has a higher hourly rate than Mexico.

How did Japanese carmakers with factories in Mexico respond to the new NAFTA requirement? What is your interpretation of tariff's role in multinational business