Metalsa highlighted that the interdependence of auto parts between Mexico and the United States has grown, driven by the rules of origin of the USMCA.
The company manufactures automotive components for several major U.S. automakers, including Ford Motor Company, General Motors, and Stellantis North America, among others. In total, it employs 3,700 workers in the United States.
Interdependence of auto parts
In a letter to the USTR, Metalsa asked that the automotive rules of origin not be changed in the USMCA review.
Like the automotive and auto parts industry, Metalsa has benefited from the current operation of the USMCA since its entry into force in 2020. In particular, duty-free treatment for auto parts that comply with the agreement has been a key factor. As a result, the company has further integrated its operations in North America. In addition, it has expanded its manufacturing presence in the United States.
As a result of this integration, the performance of U.S. operations depends largely on their link with Mexico. In effect, the actions taken to comply with the USMCA’s rules of origin strengthened operational interdependence. Thus, the plants in both countries function as a single production system.
Metalsa has a significant manufacturing presence in the United States. It operates production facilities in Elizabethtown, Hopkinsville, and Owensboro, Kentucky. It also has a plant in Roanoke, Virginia.
The company also manages sequencing centers in San Antonio, Texas, and Sterling Heights, Michigan. Finally, it has a sales office in Novi, Michigan, from where it coordinates part of its operations in the US market.
Section 232
In Metalsa’s opinion, the Trump administration’s measures to encourage greater investment in the domestic automotive industry represent an important political signal. In particular, the imposition of tariffs on automobiles and auto parts under Section 232 of the Trade Expansion Act of 1962 is seen by this company as a positive step. Furthermore, from its perspective, these actions seek to strengthen manufacturing in the United States.
However, the real impact of these investments depends, to a large extent, on reducing disruptions in the North American supply chain for vehicles and auto parts. For this reason, tariff policy is relevant. In this context, the Trump Administration has implemented measures considered strategic to sustain regional productive integration.
Specifically, the temporary exclusion of auto parts that comply with the USMCA from Section 232 tariffs makes a difference. Likewise, the priority given to tariffs on automobiles and auto parts under the “cumulation” criterion guides investment decisions. Finally, the compensation regime for domestic manufacturers against tariffs on imported auto parts contributes to the industrial policy objectives defined by President Trump.