Full report here The Trump administration is preparing a proposal that would significantly tighten automotive sourcing requirements under the US-Mexico-Canada Agreement (USMCA), potentially requiring that half of all components and materials used in a vehicle originate from the…
ited States in order to qualify for the trade pact’s preferential tariff treatment, according to a . The proposal, which is being developed ahead of formal negotiations over the future of the North American trade agreement, would mark one of the most substantial revisions to the automotive rules of origin since the USMCA replaced NAFTA in 2020
Under the current agreement, vehicles must contain at least 75% North American content by value to qualify for lower tariffs. However, the existing rules do not require any minimum level of US-specific content, allowing automakers to meet the threshold through a combination of parts and materials sourced from the United States, Mexico, and Canada. The administration’s new proposal would introduce a distinctly American content requirement, mandating that 50% of a vehicle’s components and materials come directly from US suppliers.
Supporters of the measure argue that it would encourage manufacturers to expand production within the United States, strengthen domestic supply chains, and create additional jobs in the American automotive sector. The proposal is consistent with President Donald Trump’s long-standing emphasis on reshoring manufacturing and reducing reliance on foreign production networks. The move could have significant implications for the highly integrated North American auto industry, where vehicles often cross borders multiple times during the manufacturing process.