US trade commission launches review of USMCA automotive rules of origin

By David Shepardson

WASHINGTON, Feb 19 (Reuters) - The U.S. International Trade Commission has initiated an probe into the automotive rules of root nether the United States-Mexico-Canada ‌trade agreement, the committee said successful a connection connected Thursday.

The probe volition analyse ‌the "impact connected the U.S. economy, effect connected U.S. competitiveness, and relevancy considering caller exertion changes," the connection said.

The ​rules of root nether USMCA boosted the determination worth contented requirements successful bid for manufacturers gathering cars successful immoderate of the 3 countries to suffice for free-trade status. This required North American manufacturers to root much inputs from wrong the USMCA region, fundamentally altering their proviso ‌chains.

The rules necessitate 75% North American ⁠content for manufacturers to get duty-free entree to the U.S. market, and necessitate 40% of a rider car's contented to beryllium manufactured successful ⁠the U.S. oregon Canada, based connected a database of "core parts" including engines, transmissions, assemblage panels and chassis components. The threshold for pickup trucks is 45%.

The ITC plans to clasp a nationalist ​hearing aboriginal ​this twelvemonth and volition contented the study by ​July 2027.

USMCA is the modern, trilateral ‌free-trade statement that took effect successful 2020, replacing the 1994 North American Free Trade Agreement.

USMCA has shielded Mexico and Canada from the bulk of President Donald Trump's tariffs, arsenic goods that comply with its rules of root tin participate the U.S. duty-free.

The U.S. Trade Representative's Office said past period that imaginable reforms for USMCA see stronger rules of root for ‌industrial goods.

Major automakers including General Motors, Tesla, Toyota ​and Ford person urged the Trump medication to widen ​USMCA, which they telephone important to ​American car production.

Stellantis said vehicles made extracurricular North America should travel rules ‌on constituent root to "mirror oregon efficaciously lucifer ​those imposed by the ​USMCA" oregon the Trump medication should driblet tariffs connected Mexican and Canadian USMCA-compliant rider vehicles.

The automaker added that nether 15% tariffs with Japan, U.S. vehicles complying ​with North American contented rules "will ‌continue to suffer marketplace stock to Asian imports, to the detriment of American ​automotive workers."

(Reporting by David Shepardson successful Washington and Ryan Patrick Jones successful Toronto; ​Editing by Daphne Psaledakis and Matthew Lewis)