US pushes for higher North American content rules in USMCA auto talks

The Trump administration is seeking to increase North American vehicle content requirements to 82% under a revised USMCA. The US also wants 50% of a vehicle's value to come specifically from US production. These proposals were presented during bilateral talks in Mexico City, which ended on Friday. Canada was not included in these negotiations.

Key Highlights

• US proposes raising North American vehicle content to 82 percent under revised USMCA
• Fifty percent of vehicle value would need US-specific production under new rules
• Canada excluded from recent US-Mexico automotive trade talks
• US seeks stricter calculation for high-value auto components
• Recent fire at Mobis India plant disrupts Hyundai component supply

Details of Proposed Changes

The current USMCA requires 75% of a vehicle's value to originate from North America for preferential trade access. The new US proposal raises this to 82%. Of this, 50% must be produced in the United States. The proposals do not allow Canadian parts to count toward the new totals. Industry officials believe the US Trade Representative, Jamieson Greer, may finalize new rules with Mexico before involving Canada.

Under current rules, 40% of core parts' value, such as engines, transmissions, major body stampings, and EV batteries, must come from high-wage areas, defined as the US or Canada. This requirement increases to 45% for pickup trucks. The method for calculating the proposed 50% US-specific threshold remains unclear.

Additional US Proposals and Industry Impact

The US also wants to raise regional content requirements for heavy trucks to 75%, up from the current 70%. The administration seeks to implement a stricter method for calculating high-value components. This would reverse a 2023 dispute panel decision that allowed more non-North American parts in vehicles.

Discussions also addressed steel and aluminum trade. The US aims to include economic security provisions to limit the role of China and other third-party nations in USMCA supply chains. No talks with Canada have been scheduled at this time.

Recent Industry Developments

Domestic vehicle sales in North America surpassed 193,000 units. Exports increased to 41,914 units, driven by higher volumes across passenger vehicles. In May 2026, domestic sales rose 4% and exports increased 61%, helping Toyota Kirloskar Motor achieve total sales of 33,120 units.

On May 31, a fire at Mobis India Limited's Irrungattukottai plant halted the supply of audio components to Hyundai Motor. This incident may impact production schedules for Hyundai vehicles in the region.

CarBike 360 Says

The proposed changes signal a decisive shift toward strengthening regional manufacturing under USMCA. While the move could boost local production and jobs, it may also raise costs and challenge automakers to adapt quickly. As negotiations continue, the outcome will play a crucial role in shaping the future of North America’s automotive supply chain and competitive landscape.