Automotive sector: 3 rigorous proposals in the U.S.
As part of the automotive sector‘s comments in the USTR’s biennial report on the implementation of the USMCA , Ansley International Consultants synthesized the following three stringent proposals.
Given the alarming increase in investment in Mexico, particularly from China, increase most-favored-nation (MFN) tariff rates on automobiles and auto parts, and in particular electric vehicles and related components.
Strengthen compliance and enforcement of treaty commitments on labor issues.
Pay greater attention to increasing investment in Mexico from China in the automotive sector, and advance in the standardization of criteria for monitoring inbound investment to the North American region.
Automotive Sector
Eighteen comments from the automotive sector were submitted to the USTR.
Generically, the stakeholders also request:
Optimally implement the commitments related to the origin requirements applicable to the sector. Analyze the implementation and operation of the USMCA in order to determine if the origin provisions need to be adapted to the current scenarios faced by the industry.
In light of the 2026 revision of the USMCA , there is a need to provide the sector with greater clarity on the operation of the origin requirements.
The persistent trade imbalance in the automotive sector between the United States and Mexico, as well as the increase in foreign direct investment from China in Mexico, is a cause for concern for the Mexican automotive industry in the run-up to the U.S. presidential election.
The automotive industry is highly sensitive and politically relevant to the United States, so it is likely that the sector’s expression of dissatisfaction and uncertainty will be reflected in the U.S. political narrative during 2024.
Review
The suggestions made by relevant automotive industry stakeholders to the U.S. authorities should be taken into consideration as part of Mexico’s strategies towards the joint review process regarding the functioning of the T-MEC in 2026.
The automotive sector also made technical and substantive proposals to the USTR.
Some of those making proposals were:
- United Auto Workers (UAW).
- Labor Advisory Committee for Trade Negotiations and Trade Policy (LAC).
- Volkswagen.
- Daimler Truck AG.
- Autos Drive America (ADA).
- American Automotive Policy Council (AAPC).
- Mexican Automotive Industry Association (AMIA).
