The United States has initiated a review of the automotive origin rules under the US-Mexico-Canada Agreement

The United States International Trade Commission (ITC) announced on Thursday that it will investigate the automotive origin rules under the United States-Mexico-Canada Agreement (USMCA), assessing its impact on the U.S. economy, competitiveness, and its appropriateness in the context of technological changes.

The commission stipulates that to qualify for duty-free treatment, the regional value content required for automobiles must be increased, requiring automakers to source more parts from North America, thereby reshaping the supply chain. The current threshold is that automobiles must contain 75% North American content to enter the U.S. market duty-free, and it requires that 40% of core parts (such as engines, transmissions, bodies, and chassis) for passenger cars must be manufactured in the U.S. or Canada; the threshold for trucks is 45%.

General Motors (GM.US), Tesla (TSLA.US), Toyota (TM.US), Ford (F.US), and Stellantis (STLA.US) have all called for an extension of the agreement