The Trump administration wants to increase the level of regional content in North American-built vehicles to 82 per cent to qualify for preferential treatment under the U.S.-Mexico-Canada Agreement on trade, with 50 per cent of that value produced in the United States, four people familiar with the U.S. negotiating position said.
The proposal, unveiled during this week’s U.S.-Mexico negotiations over revisions to the six-year-old USMCA in Mexico City, has no provision for requiring any content from Canada, which is not represented at the talks, the sources said.
The shift, if accepted, would be a major break from the current USMCA, which requires that 40 per cent of the “core parts” value of North American passenger vehicle passenger cars be produced in high-wage jurisdictions, effectively the U.S. or Canada. That threshold is 45 per cent for pickup trucks.
Over all, vehicles must have 75 per cent North American content to qualify for preferential treatment under USMCA.