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.

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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
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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