USMCA Rules of Origin Update for Auto Parts
The USMCA Joint Review Committee released updated regional value content requirements for automotive parts in late 2025, with new staging schedules for steel and aluminum content. Manufacturers and importers have until mid-2026 to comply.
The United States-Mexico-Canada Agreement's automotive rules of origin have always been its most complex provisions, and the Joint Review Committee's 2025 update adds another layer of complexity for parts suppliers and OEMs. The new requirements raise the Regional Value Content (RVC) threshold for core auto parts from 66% to 69% effective July 1, 2026, while introducing a new steel and aluminum content requirement that mandates at least 75% of the steel and aluminum used in a vehicle be sourced from North America.
For HTS Chapter 87 importers, the immediate practical challenge is documentation. The updated origin certification must now include a separate attestation for steel and aluminum content by weight, using a new format that CBP published in December 2025. Importers relying on a supplier's certification should request updated documentation well before the July 2026 effective date, as first-year penalty exposure for non-compliant claims can reach three times the unpaid duties.
The update also clarifies the treatment of "core parts" for purposes of the labor value content (LVC) requirement, which requires that 40-45% of a vehicle's value be produced by workers earning at least $16/hour. Battery electric vehicle (BEV) components received a separate staging schedule acknowledging the difficulty of meeting LVC requirements for battery packs currently produced in lower-wage regions. Importers with BEV supply chains should consult the updated USMCA Uniform Regulations for the revised LVC calculation methodology.