The USTR has called for adjustments to the USMCA’s rules of origin for the automotive sector. Although the USMCA already has the strictest standards, the USTR seeks to strengthen them. In this context, the USMCA Automotive Rules of Origin play a crucial role in determining supply chain practices.
This request appears in the third of five reports it is required to submit to Congress on the USMCA’s impact on the automotive industry.
The agency identifies three key challenges: supply chain disruptions, increased Chinese competition, and changes in U.S. trade policy. These challenges directly affect the implementation of USMCA Automotive Rules of Origin for manufacturers in North America.
According to the USTR, U.S. content in cars manufactured in Mexico and Canada is declining. Additionally, the automotive trade deficit with Mexico remains high.
USMCA Automotive Rules of Origin
The USTR sees the 2026 Joint Review of the USMCA as an opportunity. It seeks to incentivize more U.S. and North American content in the value chain. Notably, the USMCA Automotive Rules of Origin are central to this strategy.
It also proposes mitigating risks from suppliers in non-market economies. This includes reducing dependence on imported semiconductors, circuit boards, and displays.
The agency asserts that this dependence is a vulnerability. This is especially true for emerging technologies: electric and autonomous vehicles. It poses a strategic and economic risk to North American manufacturers and workers.
For this reason, the USTR suggests changing the rules of origin. The goal: to discourage dependence on third countries and promote production in North America. Consequently, USMCA Automotive Rules of Origin could be further modified to address these concerns.
Steel and Aluminum
The USMCA has already raised the Regional Value Content (RVC) from 62.5% to 75%. It also added regional procurement requirements for essential parts, steel, and aluminum, as well as a new provision on labor content.
In 2025, the U.S. government imposed tariffs on vehicles and components on national security grounds (Section 232). It also imposed tariffs on steel and aluminum.
Goods that meet the USMCA’s rules of origin receive partial exemptions; non-U.S. components remain subject to tariffs.
North American Content
The USTR proposes adjusting the USMCA’s rules of origin for non-automotive manufactured goods, aiming to ensure that trade benefits flow to the United States, Mexico, and Canada. The initiative prioritizes strengthening standards, harmonizing certifications, and reducing external dependence in critical sectors such as electronics and machinery.
In 2025, Mexican non-automotive exports totaled $382,489 million, up 16.1% year-over-year and accounting for 63.3% of the total. Analysts and experts are calling for the modernization of customs procedures and the standardization of certificates of origin to increase North American content and limit key imports from China.