USTR Presses for Tighter Auto Rules of Origin in USMCA USTR has recommended tightening USMCA automotive rules of origin, citing a shrinking US content share in vehicles assembled in Mexico and Canada and regional dependence on chips, circuit boards and display panels from non-market economies. The push arrives as the treaty enters annual reviews through 2036 and Mexico faces 25% duties on non-qualifying vehicles and parts. Automakers including Volkswagen, Nissan, General Motors and Toyota, along with tier-one and SME suppliers and steel and aluminum producers, face higher compliance costs, while congressional analysts question the executive's authority to alter origin rules without legislative approval. Vehicles built in Mexico may soon have to clear a higher North American content bar. The Office of the United States Trade Representative (USTR) has formally recommended that the automotive rules of origin in the USMCA be made stricter during the treaty's review cycle, targeting a regime that already sets the toughest content thresholds of any trade agreement currently in force. For Mexico, where close to eight of every ten exported vehicles head to the US market, the recommendation carries direct consequences for plant allocation, supplier contracts and tariff bills. The country's automotive complex is already operating under duties of 25% on vehicles and parts that fall outside the treaty's thresholds, and US purchases of Mexican vehicles and auto parts dropped US$4.87 billion in the 1Q26 against the same months of 2025. What USTR Is Asking For The recommendation appears in the third of five reports the agency must submit to the US Congress under statute, each assessing how the treaty has performed for the automotive sector. Three arguments carry the case. The first is dilution. USTR maintains the US share of content inside vehicles rolling off assembly lines in Mexico and Canada has been sliding rather