USMCA rules of origin for automobiles; longer transition period for production in Canada, Mexico

USMCA rules of origin for automobiles

The trade agreement between the United States, Mexico, and Canada (often referred to as “USMCA”) includes new rules of origin to claim preferential treatment for automotive goods.


These rules of origin include higher regional value content thresholds, mandatory requirements to produce core parts in the region, mandatory steel and aluminum purchasing requirements, and a labor value content requirement.

The USMCA provides for “alternative staging regimes” (ASRs) for passenger vehicles or light trucks and thus permit a longer period of transition so that that future production is able to comply with the new rules. Vehicles covered by an ASR are eligible for preferential tariff treatment based on the rules of origin.

The following companies have been approved by Canada and Mexico to import certain vehicles on the basis of an ASR.

  • Cooperation Manufacturing Plant Aguascalientes (COMPAS, for certain Mercedes-Benz models)
  • Fiat Chrysler Automobiles
  • Ford Motor Company
  • Honda Motor Company
  • Hyundai Motor Company
  • Kia Motors Manufacturing Georgia
  • Kia Motors Mexico
  • Nissan Motor Company
  • Tesla, Inc.
  • Toyota Motor Corporation
  • Volkswagen
  • Volvo Cars

Read a release from the Canadian government

Read a release (Spanish) from the Mexican government

KPMG observation

The United States has not yet issued an announcement (given the transition to a new administration). Because all three countries (United States, Canada, and Mexico) must approve ASRs, the identified companies must also be cleared by the United States.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094

Irina Vaysfeld
T: 212-872-2973

Amie Ahanchian
T: 202-533-3247

Christopher Young
T: 312-665-3229

Gisele Belotto
Managing Director
T: 305-913-2779

George Zaharatos
T: 404-222-3292

Andy Doornaert
Managing Director
T: 313-230-3080

Jessica Libby
Managing Director
T: 612-305-5533

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