The Trump administration is preparing a policy proposal that would require 50% of the dollar value of components and materials in automobiles to originate in the United States for the vehicles to qualify for lower tariffs under the U.S.-Mexico-Canada Agreement (USMCA), according to reporting that cites people familiar with the plans.
Under the current USMCA framework, 75% of a vehicle’s materials must come from North American sources to receive preferential tariff treatment. That standard, however, does not include a specific requirement that any portion of those materials be manufactured or sourced in the United States. The new proposal would add a U.S.-content threshold measured by the dollar value of parts and materials.
Officials prepared the proposal in advance of negotiations to revise the USMCA, which President Trump signed in 2020 and which is scheduled for review this year, the people said. A U.S. delegation has traveled to Mexico City this week to begin formal discussions on the pact with Mexican officials as part of that review process.
Sources describe the proposed 50% U.S. content requirement as the administration’s opening negotiating position with Mexico. Those sources also caution that the proposal could be altered during negotiations as talks proceed over the coming months.
In addition to the U.S.-specific content requirement, the U.S. negotiating team plans to seek an increase in the overall North American content requirement above the current 75% threshold, according to other people familiar with the matter. That suggested adjustment would affect how much of a vehicle’s value must be produced within North America to qualify for tariff advantages under the agreement.
The reporting that disclosed these negotiation positions attributed the information to people with knowledge of the administration’s plans. The individuals characterized the measures as initial proposals for the U.S. delegation’s agenda during the talks in Mexico City and noted the potential for change as negotiations continue.
At this stage, the proposal exists as an opening stance in the administration’s broader effort to renegotiate parts of the pact. How the Mexican and Canadian governments respond, and whether the proposed thresholds are ultimately adopted or modified, were not described in the reporting cited by those familiar with the plans.
Summary: The administration plans to propose that 50% of automobile components and materials be sourced in the U.S. to qualify for reduced tariffs under the USMCA, while also seeking to raise the North American content requirement above 75%. The proposal is an opening negotiating position prepared ahead of the pact’s scheduled review, and U.S. officials are in Mexico City for initial formal discussions.