Trump seeks to raise North American auto content to 82% in USMCA revamp

The Trump administration is pushing to raise the share of regional content required for North American vehicles to qualify for duty-free trade under the U.S.-Mexico-Canada Agreement to 82 percent — up from the current 75 percent — with half of that value required to originate specifically from the United States, four sources familiar with the U.S. negotiating position told Reuters.

The proposal, advanced during bilateral U.S.-Mexico negotiations in Mexico City this week, would overhaul the framework governing roughly $1.6 trillion in annual trilateral commerce — with potential consequences for auto supply chains and vehicle prices for consumers across the United States. Canada was not represented in the talks.

Four sources familiar with the U.S. negotiating position told Reuters that "the Trump administration wants to increase the level of regional content in North American-built vehicles to 82 percent to qualify for preferential treatment under the U.S.-Mexico-Canada Agreement on trade, with 50 percent of that value produced in the United States."

Under current USMCA rules, vehicles must contain at least 75 percent North American content, with 40 percent of core parts sourced from high-wage jurisdictions — a category that includes both the United States and Canada — rising to 45 percent for pickup trucks. The proposed revision would lift the overall threshold to 82 percent while mandating that exactly half the vehicle's content value come from the United States alone. The proposal includes no provision for counting Canadian parts, according to Reuters.

U.S. Trade Representative Jamieson Greer is expected to finalize the new rules with Mexico before presenting them to Canada, according to Reuters. Industry officials anticipate Canada could face the revised framework as a settled U.S.-Mexico position, with little room to renegotiate. Canada was not included in this week's Mexico City talks.

The proposal reflects Trump administration officials' repeated questioning of why Canada should export vehicles to the United States, Reuters reported. Trump previously imposed a 25 percent tariff on Canadian and Mexican vehicles and a 50 percent duty on steel, aluminum and copper from both countries.

USMCA entered into force in 2020, replacing the 1994 North American Free Trade Agreement. The pact governs approximately $1.6 trillion in annual trade among the three countries.

USMCA's automotive content rules were a centerpiece of the 2020 agreement's design; a renegotiation of this magnitude could reshape North American manufacturing and the trade framework that has anchored the region's economy for decades.