The US is weighing potential changes to North American trade rules that could increase tariffs on imported vehicles and encourage greater domestic production.
Bloomberg, citing sources familiar with the matter, reported that US officials have discussed proposals that would require imported vehicles to include a minimum proportion of components made in the US.
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A separate idea being reviewed would curb carmakers’ ability to lower tariff liabilities under the US-Mexico-Canada Agreement (USMCA), raising the cost of shipping vehicles across North American borders.
The talks are still at an early stage, and no formal proposals have yet been put to Canada or Mexico.
A spokesperson for the Office of the US Trade Representative told the publication that the administration is reviewing the agreement as part of a broader push to bring manufacturing back to the US but did not comment on the specific options being considered.
The discussions underline continuing concern in Washington that existing trade arrangements have not led to a meaningful relocation of automotive production to the US.
US President Donald Trump earlier imposed a 25% tariff on imported vehicles and auto parts to support domestic manufacturing.
Automakers have since announced investment plans, and some production moves away from Canada, Mexico and Japan.
Even so, imports still account for a large share of the market, especially for vehicles priced at $30,000 or less.
Under the current agreement, 75% of a vehicle’s parts must come from North America, while 40% to 45% must be made by workers earning at least $16 an hour.
Vehicles meeting those conditions can move across borders without duties.
That system has been disrupted by more recent US tariffs, which apply duties to non-US content in vehicles that would otherwise qualify under USMCA rules.
The administration has also indicated that it intends to apply similar tariffs to compliant auto parts, although that step has been postponed because of its complexity.
Following lobbying by the industry, the administration introduced some tariff relief, including measures allowing carmakers that build vehicles in the US to offset duties on imported parts.
Officials are now considering narrowing those relief provisions, a move that could lift effective tariffs on USMCA-compliant vehicle imports to about 10%, one source told the news agency.
