A proposed US requirement for vehicles produced within the North American trade zone to contain at least 50% US-made components would create greater challenges for Mexico than for Canada, Canadian Prime Minister Mark Carney has said.
The proposal is being discussed as the review process for the US-Mexico-Canada Agreement (USMCA) begins.
Carney, as reported by Bloomberg, said vehicles assembled in Canada already meet the proposed threshold on average, whereas many vehicles manufactured in Mexico do not.
While stressing that he was “not endorsing” the proposal, he said Mexico’s automotive industry would face more difficulty complying with the requirement if it were adopted.
Under the current USMCA, negotiated during US President Donald Trump’s first administration, 75% of a vehicle’s value must originate in North America to qualify for tariff-free treatment.
Since returning to office, Trump has introduced additional tariffs on imported vehicles, arguing that the measures are designed to encourage manufacturers to relocate production and jobs to the US.
Carney’s comments came as Canada’s Minister of Internal Trade, Dominic LeBlanc, met US Trade Representative Jamieson Greer in Washington as part of discussions related to the agreement’s review.
According to a letter cited by Bloomberg and addressed to Greer and Mexican Economy Minister Marcelo Ebrard, LeBlanc reiterated Canada’s commitment to extending the USMCA for another 16 years.
He also stated that Canada was willing to consider proposals from either partner that would provide benefits across all three economies.
Carney said the US had raised around 60 technical trade concerns involving Mexico, compared with approximately 30 involving Canada.
However, he characterised Canada’s disputes with the US as more “fundamental, structural issues”, highlighting tariffs on vehicles, steel, aluminium and lumber.
Canada has responded with counter-tariffs on US steel and the US-produced content of vehicles.
In addition, some provinces have removed US alcohol products from government-operated liquor stores.
