In the run-up to the revision of the United States-Mexico-Canada Agreement (USMCA) , scheduled for July 2026 and whose consultations are expected to begin in September 2025, the automotive sector will be one of the industries at the center of trilateral negotiations, with rules of origin that could redefine supply chains in North America.

In the webinar T-MEC: Review in progress – challenges and perspectives for automotive rules of origin , Bertha Martínez, coordinator of the Bachelor’s Degree in International Logistics at CETYS University , indicated that among the current requirements of the T-MEC for vehicles manufactured in Mexico to enter the US market is the regional content value .

“This means that parts of the car must have been manufactured in Mexico, the United States, or Canada, and in this case, the USMCA requires 75% regional content ,” he stressed, adding that this means that of the total value of the car, 75% “must come from or have been made up of parts that were produced in Mexico, the United States, and Canada.”

Under the North American Free Trade Agreement (NAFTA) , the predecessor to the USMCA, the regional value content was 82.5 percent.

Another requirement is the steel and aluminum content of the vehicles, 70% of which must come from North America, “Mexico, the United States, and Canada, and this gives us the possibility of not only being the condition, but also rolling, sheet metal, ironing, and profiling,” with even stricter rules for these metals, Martínez specified.

Salary is another factor taken into account. Under the USMCA, this requirement establishes a minimum wage of $16 per hour in Mexico, yet the country’s industry “falls far short” of this figure .

Another requirement is auto parts, which the trade agreement establishes as 75% regional content for essential components (engine or transmission) , 70% for primary components, and 65% for complementary components. “So, basically, we’re talking about three-quarters of an engine or transmission being produced in Mexico, the United States, and Canada, and we know we have a very strong supply of these types of components from Asia,” said the specialist, who added that this represents a challenge for the country’s automakers.

Another requirement is that companies must work with a certificate of origin , which was already required under NAFTA. “All free trade agreements have their certificates of origin, but currently, nine mandatory minimum pieces of information are being required from all members of the automotive supply chain,” explained Bertha Martínez.

For his part, Ismael Plascencia López, professor and researcher at the School of Business Administration at CETYS University, said that the complexity of the value chains in the automotive industry must be understood .

“It’s very difficult when it comes to complying with requirements and crossing customs, because we’re talking about a vehicle that can be assembled in Canada, for example, the modules cross several times from the United States to Canada, from Canada to the United States, and back again. So, thinking about the issue of how tariffs are applied will be very cumbersome administratively speaking, and that’s the great challenge we face from the perspective of regional content, both labor and what the auto parts represent,” he explained.

The most-favored-nation option

Given the complexity and costs associated with complying with the USMCA’s rules of origin, some automotive companies are opting for the most-favored-nation (MFN) approach , a principle established by the World Trade Organization (WTO) that treats all trading partners equally and is essential for promoting the stability of global trade.

Bertha Martínez pointed out that in 2019, 96% of automotive exports qualified for 0% tariffs under the USMCA, but by 2023, that proportion had dropped to 84%, while 16% opted to pay the 2.5% MFN tariff currently imposed by the United States on vehicle imports.

“We’re seeing an increasing number of countries opting to pay this most-favored-nation tariff, leaving the USMCA issue behind, because compliance is cost-effective for companies because it obviously involves documentation, auditing, and restructuring the supply chain,” he emphasized.

In his presentation, Alfredo Valadez, professor and researcher at the School of Business Administration at CETYS University, noted that the United States has had a trade deficit for just over 30 years, a situation underlying President Donald Trump’s decision to impose tariffs. The specialist also noted that Mexico’s trade dependence on its northern neighbor exists.

“The economic threads of Mexico’s foreign trade depend on a single destination, unfortunately,” he stressed.

The USMCA review represents an opportunity for Mexico to negotiate strategically , not only defending the automotive sector but also promoting electromobility and building more resilient supply chains. However, the review’s success will depend on negotiators’ ability to address the complexities, challenges, and alternatives with the goal of creating a scenario that benefits all three countries.

Comment and follow us on X:  @Eliseosfield  /  @GrupoT21

El cargo USMCA review could redefine automotive rules of origin apareció primero en T21.

The outlook for global trade in 2025 is uncertain due to the escalation of tariffs around the world, the World Trade Organization (WTO) said . It lowered its expectations for growth in merchandise trade volume by almost three percentage points, and now expects a 0.2% contraction this year.

In its 2025 Annual Report , which analyzes the work carried out in 2024 and early 2025, the multilateral organization indicated that although trade has proven resilient in recent months, risks abound due to geopolitical criteria, which harm global economic growth.

“Low-income economies will suffer the greatest welfare losses,” stressed WTO Director-General Ngozi Okonjo-Iweala.

The report highlighted that the most-favored-nation principle underpins approximately 74% of global merchandise trade, which is a positive step in the face of the continued push for tariffs.

Regarding agriculture, Ngozi Okonjo-Iweala recalled that no significant progress had been made either before or during the 13th Ministerial Conference (MC13) , held in Abu Dhabi between February and March 2024, which, she said, was one of the most important events of last year.

According to the report, services trade increased by 9% in value in 2024, reflecting growth in 2023. “All sectors contributed to this increase, including transport (8%), travel (13%), goods-related services (5%), and other commercial services (8%).”

He also highlighted that merchandise exports from developing economies increased from $7.7 trillion in 2020 to $11.3 trillion in 2022.

“The share of least developed countries (LDCs) in world trade has almost doubled over the past 30 years, rising from 0.59% in 1995 to 1.17% in 2023,” he noted.

Given the current economic environment, the WTO Director-General emphasized that “the global trading system is currently experiencing its worst disruptions since the Second World War,” and stressed that “global trade is much more than tariffs, and so is the WTO.”

Among the activities carried out by the WTO, the launch of the Young Business Leaders Program was highlighted, bringing this segment of the population closer to the work carried out by the organization, selecting eight young leaders for the one-year program.

Meanwhile, the WTO website attracted a record of more than 4.4 million monthly visits in 2024, surpassing the previous high of 3.5 million in 2023.

During MC13, 10 multilaterally agreed decisions and declarations were adopted, covering development, dispute settlement reform, and other areas.

The Director-General, in her capacity as Chair of the Trade Negotiations Committee, urged WTO members to adopt a renewed approach to advancing the body’s negotiations, emphasizing commitment, flexibility, and participation.

The report, divided into four chapters, covers other activities carried out by the WTO. It also recalled that 30 years ago, the Uruguay Round agreements transformed the General Agreement on Tariffs and Trade into the WTO.

“Since their inception, open and predictable international markets, anchored in WTO rules, have contributed significantly to strengthening the global economy,” he said.

The WTO’s annual report highlights the work carried out by the organization before and after the tariff measures imposed by the United States, which have generated a context of uncertainty and affected various economies around the world.

“The WTO has an important role to play as a forum where our 166 members can share their trade concerns and propose solutions,” the document emphasized.

Comment and follow us on X:  @GrupoT21

El cargo WTO highlights resilience of global trade in the face of escalating tariffs apareció primero en T21.