The U.S. is pushing for a minimum level of American-made content in Mexican-built vehicles, a demand that would reshape the integrated North American auto supply chain.
The U.S. is pushing for a minimum level of American-made content in Mexican-built vehicles, a demand that would reshape the integrated North American auto supply chain.

U.S. and Mexican negotiators concluded their first bilateral round to revise the USMCA on Friday, with Washington demanding stricter rules of origin that would require a minimum percentage of U.S.-specific content in cars and trucks assembled in Mexico.
"The end game continues to be that Canada and Mexico have to be able to walk away with the most preferential access to the United States of any countries in the world," said Dan Ujczo, a lawyer at Cenovus Energy who specializes in North American trade.
The talks, held in Mexico City on May 28-29, covered automotive rules of origin, steel and aluminum trade, and economic security. Two more rounds are scheduled: June 16-17 in Washington and July 20 back in Mexico City, ahead of the July 1 joint review deadline. The current USMCA requires 40 percent to 45 percent of the value of North American-built vehicles to come from higher-wage factories, effectively in the U.S. or Canada, based on a list of core parts including engines, transmissions, and chassis components.
The negotiations come as the Trump administration's 25 percent global tariffs on autos and auto parts and 50 percent tariffs on steel, aluminum, and copper have effectively ended three decades of duty-free North American trade. The six-year-old USMCA underpins nearly $1.6 trillion in annual trilateral trade, and any changes to rules of origin could disrupt deeply integrated supply chains where components cross borders multiple times before final assembly.
Deputy U.S. Trade Representative Jeff Goettman led the American delegation. The specific percentage of U.S.-specific automotive content Washington is seeking was not immediately disclosed, but the shift marks a significant departure from the existing agreement, which treats U.S. and Canadian content as interchangeable under the higher-wage labor value content rule.
U.S. Trade Representative Jamieson Greer said Tuesday that Washington wants to strengthen North American rules of origin to boost U.S. manufacturing. "I think that over the course of these negotiations, we are going to be talking about rules of origin in a way that enhances U.S. content in these goods," Greer said.
Steel protections and the China factor
U.S. negotiators also pushed for a requirement that Mexican and Canadian steel receiving preferential tariff treatment be melted and poured in North America, according to Barry Zekelman, CEO of steel tube maker Zekelman Industries. There is no such requirement in the current USMCA, and Zekelman said it would reduce a flood of Chinese steel components entering Mexican manufacturing operations. The U.S. also wants Mexico to match American tariffs on steel imports from outside North America.
The push to close loopholes reflects broader concerns about China using Mexico as a backdoor to the U.S. market. Mexico has become one of the most important export manufacturing countries globally, attracting significant Chinese investment in factories that assemble goods for the North American market.
Supply chain implications
Pete Mento, Director of Global Trade Management Services at Baker Tilly, said each nation enters the negotiations with leverage. "The Mexico that we have today in 2026 is not the Mexico that was negotiating with us in 1991 and 1992 for NAFTA," Mento said. "It is one of the most important exporting manufacturing countries in the world and has become a nation of first resort for many countries, especially China, looking for inexpensive skilled labor."
The talks are complicated by the exclusion of Canada, which was not invited to the current bilateral rounds. The U.S. has signaled it may pursue separate bilateral agreements with Canada and Mexico if the trilateral framework cannot be salvaged. Unifor national president Lana Payne criticized the U.S. demands as "one-sided" and a departure from previously agreed-upon duty-free trade conditions.
The next round in Washington will include discussions on agriculture and a level playing field, broadening the scope beyond industrial goods. The outcome of these negotiations will determine whether the USMCA survives as a trilateral pact or fractures into bilateral arrangements, reshaping the competitive landscape for automakers, steel producers, and manufacturers across North America.
This article is for informational purposes only and does not constitute investment advice.