US May Demand 50% U.S.-Made Parts in USMCA Talks... Impact on Korean Automakers in Focus

Push to Raise North American Parts Requirement from 75% to 82%
Movement to Strengthen Rules of Origin

U.S. and Mexico Begin First Round of Talks
Negotiations Intensify Ahead of July Sunset Deadline

Concerns for Kia and Other Mexican Producers
WSJ: "Some Affordable Models May Be Withdrawn"

The administration of U.S. President Donald Trump is reportedly set to demand stricter requirements for U.S.-made parts as a condition for automobile tariff benefits in the renegotiation of the United States-Mexico-Canada Agreement (USMCA). As a result, global automakers such as Hyundai Motor and Kia, which have used Mexico as a base for exports to the United States, are expected to face heavier supply chain burdens.

Cars awaiting shipment for export are lined up at the export yard of Pyeongtaek Port, Gyeonggi Province. 2025.7.8. Photo by Jinhyung Kang

According to foreign media reports, including the Wall Street Journal (WSJ) on the 29th (local time), the U.S. negotiating team is planning to propose that the proportion of U.S.-made parts and materials in finished vehicles be raised to over 50% as part of the USMCA revision.

The current USMCA rules require that more than 75% of automobile parts be sourced from the North American region, but there is no separate provision specifying a minimum proportion for U.S.-made parts. The Trump administration appears to be seeking to introduce such a requirement in order to expand domestic manufacturing. In addition, it was reported that the United States is also considering increasing the existing North American content requirement from 75% to 82%.

The U.S. Trade Representative (USTR) began the first round of negotiations on the 28th with the Mexican government, with economic security and rules of origin for major manufactured goods on the agenda. Canada is currently excluded from these talks. Industry insiders analyzed that the USTR may first negotiate new rules of origin with Mexico and then later explore whether Canada will accept them.

This renegotiation is in accordance with the USMCA’s six-year sunset clause, requiring both sides to decide on an extension by July. Since the start of its second term last year, the Trump administration has been pushing for stronger tariffs and rules of origin to protect domestic manufacturing.

If these stronger rules of origin are finalized, the impact on the Korean automotive industry is expected to be significant. Currently, Kia exports vehicles produced in its Mexican plant to the United States by taking advantage of USMCA tariff benefits.

If the grace period for implementation is set short or the 50% U.S.-made parts requirement is introduced as is, it is expected to be difficult to adjust supply chains in a short period. The WSJ stated, "Companies producing vehicles for export to the U.S. in Mexico may struggle to meet these requirements," and added, "Depending on the circumstances, some foreign automakers, such as Hyundai Motor, Kia, and Toyota, may consider withdrawing their affordable models from the U.S. market."

This content was produced with the assistance of AI translation services.