A proposed U.S.-Mexico trade deal would allow U.S. President Donald Trump to impose punitive tariffs of up to 25 percent on imports of Mexican-made cars, sport utility vehicles and auto parts above certain volumes, auto executives and sources said Tuesday, in a move that could hurt Japanese automakers with operations in Mexico.

The United States and Mexico agreed Monday to overhaul the North American Free Trade Agreement, pressuring Canada to agree to new auto trade and dispute settlement rules to remain part of the three-nation pact.

But a previously unreported side agreement between the two countries would allow the United States to impose "national security" tariffs on annual Mexican car and SUV imports of over 2.4 million vehicles. The side deal would allow national security levies on auto parts imports above a value of $90 billion per year. The administration plans to announce the results of a probe into whether autos and part imports pose a national security risk in the coming weeks.