US Pushes for New Rules in Auto Content Under USMCA

The Trump administration is advocating for an increase in regional content for North American-built vehicles to 82% to qualify for USMCA preferential treatment, with 50% sourced from the U.S. The proposal excludes Canadian content, reflecting a shift from current agreements and causing tensions in trilateral trade relations.

The Trump administration aims to raise the regional content requirement for North American vehicles to 82% under the USMCA, notably demanding half of that value be U.S.-produced. This significant shift, debated in U.S.-Mexico talks, excludes Canadian content, raising questions about the future of trilateral trade.

Under current USMCA rules, 40% of core parts for cars and 45% for pickup trucks must be produced in high-wage regions, primarily the U.S. or Canada. The potential policy change marks a pronounced departure, sparking negotiations with Mexico while sidelining Canada.

Auto industry insiders reveal a probable push by U.S. Trade Representative Jamieson Greer to finalize these new origin rules with Mexico, possibly presenting an ultimatum to Canada. Although a U.S.-specific content requirement is being discussed, the method of calculating the proposed figures remains unclear, generating widespread concern among stakeholders.