US proposes 82% USMCA auto RVC & mandatory 50% US parts

On July 1, 2026, the Office of the United States Trade Representative (USTR) released an official statement refusing automatic extension of USMCA under original terms. The agreement activated a 10-year annual review mechanism and will lapse in 2036 if revised terms cannot be agreed within the decade. The disruptive automotive origin rule proposal was disclosed in USTR’s Federal Register public consultation document issued in late 2025. Under the proposal, vehicles eligible for North American tariff-free treatment need to meet an 82% North American regional content threshold, plus a mandatory 50% US-sourced value requirement, with Canadian parts excluded from calculation.

Mexican Minister of Economy Marcelo Ebrard confirmed full details of the US proposal during an official press conference on May 30, 2026. While Mexico acknowledges US concerns over the trade deficit, it firmly rejects the harsh new rules, warning they will severely damage Mexico’s pillar automotive export sector. Mexico’s official negotiation baseline is to retain the existing 75% RVC benchmark and demand the US repeal Section 232 tariffs on Mexican auto steel and aluminum inputs.

The third round of bilateral automotive negotiations will take place in Mexico City the week of July 20, 2026. The Mexican Automotive Industry Association (AMIA) warned that the new rules will force automakers operating in Mexico (including numerous Chinese new energy vehicle brands) to invest billions of US dollars to restructure North American supply chains, drastically raising production costs and reshaping global nearshoring arrangements.

Source

1. Official Federal Register Notice issued by USTR;

2. Official Press Release of Mexico Ministry of Economy;

3. Reuters Industrial Exclusive Report;

4. Ifeng Auto, July 2, 2026

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