U.S. President Trump Wants 50% of North American Automobiles to be Made in the United States

U.S. President Donald Trump is pushing for sweeping new automotive trade rules that would significantly tighten content requirements for vehicles manufactured under the U.S.-Mexico-Canada Agreement (USMCA), according to people familiar with the negotiations, as cited by Reuters in a recent report.

The proposal, reportedly discussed during ongoing trade talks between the United States and Mexico in Mexico City, seeks to increase the minimum North American content requirement in automobiles from the current 75% to 82%. More significantly, the proposal would require that at least 50% of a vehicle’s value originate specifically from the United States.

The move represents one of the most aggressive attempts yet by the Trump administration to reshape North American manufacturing supply chains in favor of U.S.-based production. It also signals growing pressure on automakers operating across Mexico and Canada, both of which have long played major roles in integrated continental auto manufacturing networks.

Under current USMCA rules, which replaced the North American Free Trade Agreement (NAFTA) in 2020, vehicles must contain 75% North American content to qualify for tariff-free treatment. Existing rules also require that 40% of passenger vehicle core parts and 45% for pickup trucks be produced in high-wage jurisdictions, effectively either the United States or Canada.

The proposed revisions go far beyond those standards. According to sources familiar with the talks cited in the Reuters report, the new framework would largely exclude Canadian parts from calculations tied to the proposed U.S.-specific requirement.

Canada has notably been absent from the latest negotiations in Mexico City, and Auto industry officials believe U.S. Trade Representative Jamieson Greer may attempt to finalize terms with Mexico first before presenting them to Canada as a largely non-negotiable framework.

The negotiations are taking place amid broader tensions between Washington and its North American trading partners. The Trump administration has already imposed 25% tariffs on Canadian and Mexican automobiles and components, as well as 50% duties on steel, aluminum and copper imports from both countries. Officials have indicated that some level of tariffs could remain even under a revised trade pact.

Supporters of the proposed changes argue that the new requirements would help bring manufacturing jobs and investment back to the United States. Trump administration officials have repeatedly criticized the offshoring of vehicle and parts production to Mexico and questioned why Canada continues to maintain a significant automotive export industry tied closely to the U.S. market.

The White House has increasingly framed trade policy as a national economic security issue, particularly in sectors such as automobiles, semiconductors and strategic minerals. By forcing automakers to source more parts domestically, the administration hopes to reduce reliance on foreign supply chains and encourage new investment in U.S. factories.

Industry experts warn, however, that dramatically increasing U.S.-specific content requirements could raise production costs and disrupt supply chains. Also, automakers operating large manufacturing hubs in Mexico could be especially affected if they are unable to meet the stricter thresholds without significant restructuring.

The trade agreement underpins roughly $1.6 trillion in annual trade among the United States, Mexico and Canada, making it one of the world’s largest regional economic frameworks.

Tanmay Kadam is a geopolitical observer based in India. He has experience working as a Defense and International Affairs journalist for EurAsian Times. He can be contacted at tanmaykadam700@gmail.com.