Mexican vehicles and auto parts do not comply with USMCA rules

8.2% of light cars and 20.4% of auto parts exported from Mexico to the United States do not comply with the rule of origin of the United States-Mexico-Canada Agreement (USMCA) and enter the Most Favored Nation Mechanism (MFN) of 2.5%, informed the Mexican Automotive Industry Association (AMIA).

"However, within the USMCA there is a transition mechanism and a period for automotive companies to comply with the rules of origin, which some brands have accepted, although some will opt for the 2.5% tariff," explained José Rogelio Garza Garza, president of the AMIA.

Donald Trump, President of the United States, warned that only those products that comply with the USMCA would enter without tariffs until April 2, however Mexico is “fighting” for all vehicle and auto parts exports to enter the United States, considering the complementary agreements.

At a press conference, the Mexican automotive industry representative stated that companies that do not comply with the USMCA have confirmed that they will meet the 75% Regional Content Value (RVC) rule of origin for parts and components from North America during the transition period.

He specified that 91.8% of light vehicle exports comply with the USMCA rule, and the rest are expected to remain at 2.5% and not be subject to the 25% tariff proposed by the U.S. government.

“We are fighting the government as an industry so that the whole industry in general can continue to manage the preference we have or the USMCA, which has covered all the companies in Mexico. The extension that the United States has now given -until April 2- was for products that meet (the 75% VCR),” said Garza Garza.

Without mentioning brands or models, Garza Garza commented that there are companies that are in this transition process and that have told me that they can comply when this period is over.

He pointed out that 8.2% of the companies that export under the Most Favored Nation mechanism with a 2.5% tariff do comply with the USMCA, but they are under a transition mechanism that the US authorities do not recognize and are negotiating for all auto and auto parts exports to enter without tariffs.