The U.S. International Trade Commission (ITC) announced on Thursday that it has opened an investigation into the automotive rules of origin established under the United States-Mexico-Canada Agreement, known as USMCA. The ITC said the probe will examine the rules' impact on the U.S. economy, their effect on U.S. competitiveness, and their relevancy in light of recent technology changes.
The USMCA rules of origin raised the regional value content thresholds required for vehicles assembled in the three-member bloc to qualify for duty-free treatment. That change obliged North American manufacturers to source a greater share of inputs from within the USMCA region, a policy shift that has led to substantial adjustments in automotive supply chains.
Under the USMCA framework, manufacturers must meet a 75% North American content requirement to secure duty-free access to the U.S. market. For passenger cars, at least 40% of content must be manufactured in the U.S. or Canada, measured against a specified list of "core parts" that includes engines, transmissions, body panels and chassis components. The threshold for pickup trucks is set higher, at 45%.
The ITC said it will convene a public hearing later this year as part of the review process and aims to publish its report by July 2027.
USMCA, which took effect in 2020 and replaced the 1994 North American Free Trade Agreement, has meant that goods compliant with its rules of origin can enter the U.S. duty-free. That treatment has shielded Mexico and Canada from the bulk of tariffs imposed under the administration of President Donald Trump on non-compliant goods.
Separately, the U.S. Trade Representative's Office indicated last month that potential USMCA reforms under consideration could include stronger rules of origin for industrial goods.
Major automakers have been vocal about USMCA's role in North American production. General Motors, Tesla, Toyota and Ford have urged the administration to extend USMCA, describing the agreement as crucial for American auto production.
Stellantis commented on the trade measures, saying vehicles made outside North America should follow rules on component origin to "mirror or effectively match those imposed by the USMCA" or the Trump administration should remove tariffs on Mexican and Canadian USMCA-compliant passenger vehicles. The automaker added that under 15% tariffs with Japan, U.S. vehicles that comply with North American content rules "will continue to lose market share to Asian imports, to the detriment of American automotive workers."
The ITC review will evaluate the rules without setting policy itself, laying out findings on economic and competitiveness impacts and the extent to which technological change bears on the existing rules of origin. The scheduled public hearing and the July 2027 report deadline create a defined timetable for stakeholders to present evidence and for the commission to publish its assessment.