U.S. mulls tougher auto rules

U.S. officials are weighing tougher rules for imported cars and trucks that would make automakers prove more of each vehicle was built in North America. (msn.com) The discussion centers on the United States-Mexico-Canada Agreement, the trade pact that replaced the North American Free Trade Agreement on July 1, 2020. Under that pact, a vehicle generally needs 75% North American content to qualify for duty-free treatment, along with steel, aluminum, and labor-content tests. (ustr.gov) (trade.gov) Officials are now considering stricter checks on that regional content, according to people familiar with the matter cited by Reuters. That could mean more paperwork, more origin tracing, and more audits reaching deeper into supplier networks in the United States, Mexico, and Canada. (msn.com) (cbp.gov) The timing lines up with a broader reset in North American auto trade. The Office of the United States Trade Representative said in July 2024 that automakers were preparing for full implementation of USMCA auto rules as temporary staging flexibilities expired in 2025. (ustr.gov) The rules already changed how companies source parts. The U.S. International Trade Commission said in its July 2025 report that the auto rules of origin benefited some U.S. parts producers, while raising costs for automakers and shifting some trade away from Canada and Mexico toward non-USMCA suppliers. (usitc.gov 1) (usitc.gov 2) Federal Reserve economists found that compliance with North American preferences fell after USMCA took effect in 2020, especially for imports from Mexico, before partially recovering in 2023 and 2024. Their July 2025 note said stricter trade rules can add compliance costs even before tariffs are paid. (federalreserve.gov) The politics are familiar. U.S. trade officials have long argued that tighter auto content rules reduce “free riding” by parts made outside North America, while automakers and suppliers have warned that more complex calculations can raise costs and slow production. (trade.gov) (congress.gov) A fight over how to count regional content already reached a formal USMCA dispute. In December 2022, a panel sided with Mexico and Canada against the U.S. interpretation of key auto rules, rejecting Washington’s stricter reading of how core parts should be counted. (ustr.gov) Any new push would land as the 2026 review of the trade pact approaches and as automakers keep reorganizing electric-vehicle and battery supply chains across the region. For companies that ship engines, transmissions, batteries, and stamped parts across borders multiple times, the next fight may be less about tariffs than about proving where every piece came from. (usitc.gov) (ustr.gov)