A proposed US requirement mandating that vehicles produced within the North American trade zone contain at least 50% US-made components would likely present greater challenges for Mexico’s automotive sector than for Canada’s, Canadian Prime Minister Mark Carney has said.
The proposal is being discussed as the United States, Canada and Mexico begin the review process for the United States-Mexico-Canada Agreement (USMCA).
Vehicle Content Requirements Under Discussion
According to Bloomberg, Carney said vehicles assembled in Canada already meet the proposed threshold on average, while many vehicles produced in Mexico would face greater difficulty complying with the requirement if it were implemented.
While commenting on the proposal, Carney emphasized that he was not advocating for its adoption.
The current USMCA framework requires that 75% of a vehicle’s value originate within North America to qualify for tariff-free treatment among the three countries.
US Trade Policy Focus
Since returning to office, US President Donald Trump has introduced additional tariffs on imported vehicles, arguing that the measures are intended to encourage manufacturers to increase production and employment within the United States.
The proposed content requirement is being discussed alongside broader trade negotiations as the three countries review the agreement.
Canada Seeks USMCA Extension
Carney’s remarks came as Canada’s Minister of Internal Trade, Dominic LeBlanc, met with US Trade Representative Jamieson Greer in Washington as part of discussions surrounding the USMCA review.
According to a letter cited by Bloomberg and addressed to Greer and Mexican Economy Minister Marcelo Ebrard, LeBlanc reaffirmed Canada’s support for extending the trade pact for another 16 years.
The letter also indicated that Canada would consider proposals from either the United States or Mexico that could provide benefits across all three economies.
Trade Disputes Remain
Carney noted that the United States has raised approximately 60 technical trade concerns involving Mexico, compared with around 30 involving Canada.
However, he described Canada’s disagreements with the United States as more fundamental and structural in nature, citing tariffs on vehicles, steel, aluminum and lumber.
Canada has responded to some of those measures with counter-tariffs targeting US steel imports and the US-produced portion of vehicles.
In addition, several Canadian provinces have removed US alcohol products from government-operated liquor stores as part of broader trade responses.
The discussions highlight ongoing negotiations over the future of North American trade rules and the automotive supply chains that underpin vehicle production across the region.
