AMIA Warns of Risks in Increasing Local Content in the USMCA

A potential increase in regional content requirements under the rules of origin of the United States-Mexico-Canada Agreement (USMCA) would lead to higher production costs, curb investment, and undermine the competitiveness of the North American automotive sector vis-à-vis international competitors, said Odracir Barquera, executive director of the Mexican Automotive Industry Association (AMIA).

While testifying at a hearing of the U.S. International Trade Commission (USITIC), the representative of the light-duty vehicle manufacturers operating in Mexico noted that the USMCA countries have the world’s most stringent rule of origin—75% of the value must be derived from the region— but noted that the U.S. government’s intention to raise it to 83% and 85% would erode North America’s automotive competitiveness.

For AMIA, further strengthening these parameters would be counterproductive, given that certain inputs, key components, and cutting-edge technologies are not produced locally in sufficient quantities or at competitive prices.

According to data from the International Organization of Motor Vehicle Manufacturers (OICA) cited by the agency, North America manufactured approximately 15 million vehicles in 2025, ranking as the world's second-largest producer.

However, that same year, production in the region fell by 2.1%, causing its share of the global market to drop by one percentage point.

In contrast, China recorded a 9.7% increase in production and saw its global market share rise by two percentage points. This trend, combined with the imposition of U.S. tariffs under Section 232, presents a complex scenario for the subcontinent’s industry.

Odracir Barquera emphasized the need to comply with the December 2022 ruling by a USMCA dispute settlement panel regarding rules of origin, the continued failure to implement which is generating unforeseen costs and operational uncertainty for assembly plants.

The automotive industry called on the U.S. government to adopt an inclusive and collaborative approach in the upcoming review of the trade agreement, prioritizing investment attraction, innovation, and job creation to maintain industrial dominance in the face of competition from Asian markets.

He spoke in favor of allowing access to strategic international supplies while local supply capacity is being built up.

He also called for a review of customs procedures, where adjustments may be needed to the implementation instructions issued by U.S. Customs and Border Protection (CBP), particularly regarding the annual certifications on labor content, steel, and aluminum required of Mexico and Canada.