According to a report today from Reuters, the Trump administration is proposing stricter automotive content rules that require the use of North American-made steel, aluminum, copper and plastic resins.
US representatives for the ongoing NAFTA re-negotiations submitted a new rules of origin proposal to Mexican and Canadian counterparts on Friday, which includes a first-ever US-specific content requirement of 50 percent for cars, trucks and large engines. Negotiators also aim to raise the threshold for overall North American value content on the auto parts tracing list to 85 percent from the current 62.5 percent.
US Commerce Secretary Wilbur Ross has previously vowed to close "loopholes" in the parts list that he claims allow abundant cheap auto parts from Asia and other regions to enter the United States. However, analysts warn about the consequences of adding components to the auto parts tracing list that did not exist when NAFTA was enacted in 1994, including electronics that are primarily sourced from Asia and do not have an equivalent manufacturing market in North America.