The U.S. International Trade Commission (Commission or USITC) today released its second report on the economic impact on the United States of the United States-Mexico-Canada Agreement (USMCA) automotive rules of origin (ROOs), their operation and effects on the U.S. economy and U.S. competitiveness, and whether the rules remain relevant in light of technological changes in the United States.

The report, USMCA Automotive Rules of Origin: Economic Impact and Operation, 2025 Report, is required by section 202A(g)(2) of the USMCA Implementation Act (the Act) (19 U.S.C. § 4532(g)(2)). The Act requires the USITC, an independent, nonpartisan, factfinding federal agency, to submit five biennial reports to the President, the House Committee on Ways and Means, and the Senate Committee on Finance. The next three reports are due in 2027, 2029, and 2031. The first report was released in 2023.

The report’s Executive Summary contains detailed highlights of the Commission’s findings. Select findings are outlined below.

• The Commission’s economic modeling analysis indicated that the ROOs had concentrated effects on the U.S. automotive industry, and a negligible impact on the overall U.S. economy. 
  • The model estimated that the ROOs increased employment, production, revenue, capital expenditures, and profits for U.S. producers of parts and materials.
  • The model estimated that the ROOs slightly decreased employment, production, revenue, capital expenditures, inventories, and profits for U.S. producers of light vehicles. 
  • The model estimated that the ROOs reduced U.S. imports of light vehicles from Canada and Mexico, and increased imports from non-USMCA countries. In addition, the model indicated that the ROOs slightly increased the average price of light vehicles in the U.S. market.
• Three competitiveness factors for the automotive industry are the most likely to be affected by the ROOs: cost, investment, and product differentiation. 
  • The Commission survey found that most sourcing changes associated with meeting the ROOs resulted in an increase in production cost; however, some resulted in a decrease or no change to cost. 
  • Total investment in U.S. automotive manufacturing increased from $27.9 billion in 2019 to $87.8 billion in 2023, before declining to $34.1 billion in 2024. This change in investment is only partially attributable to the ROOs, though investments in parts manufacturing specifically are more likely to be ROOs-related. 
• Since the USMCA took effect on July 1, 2020, the U.S. market share for vehicle sales and parts consumption in the United States remained relatively unchanged. However, other factors show signs of changes in competitiveness; U.S. motor vehicle production has increased since 2020, but still falls short of 2019 levels. Conversely, U.S. parts production also increased, especially for certain core parts, and exceeds 2019 levels. In both cases, these changes are at least partially attributable to the ROOs, according to Commission modeling.
• There were mixed signs of changes in U.S. competitiveness in other USMCA countries since the USMCA entered into force. There is little change in U.S. vehicle market share in Canada and Mexico. Meanwhile, the import share of U.S. parts has increased in Canada but decreased in Mexico. In non-USMCA markets, the U.S. share of light vehicle exported to those markets remained relatively unchanged from 2019 to 2024.
• Other individual factors­­—the Inflation Reduction Act, labor strikes, macroeconomic conditions, and more—had a greater impact on the U.S. automotive industry. Nonetheless, no single factor was more impactful than the ROOs.

This report also identified several technological changes in the United States that have created a divergence related to the tariff classification or tariff treatment of similar goods in the USMCA automotive ROOs. Technological changes covered in the Commission’s 2023 report that continue to create divergences include new production processes related to aluminum vehicle bodies and increased production of electric pickup trucks.

In addition to these technologies, this report identifies components and processes related to the production of electric vehicles, such as e-axles and new battery chemistries, that create more tariff classification or tariff treatment divergences.

USMCA Automotive Rules of Origin: Economic Impact and Operation, 2025 Report (Investigation No. 332-600, USITC Publication 5642, July 2025) is available on the USITC website. Supplementing the second release of the report is an online dashboard that presents U.S. automotive trade data in an interactive format, and is available on the Commission's website.

 

About factfinding investigations: USITC general factfinding investigations, such as this one, cover matters related to tariffs, trade, and competitiveness and are generally conducted under section 332(g) of the Tariff Act of 1930 at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission’s objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.

The U.S. International Trade Commission (USITC) voted to institute an investigation of certain semiconductors and devices and products containing the same, including printed circuit boards, automotive parts, and automobiles.  The products at issue in the investigation are described in the Commission’s notice of investigation.

The investigation is based on a complaint filed by Daedalus Prime LLC of Bronxville, NY on August 23, 2022 and supplemented on September 12, 2022.  The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain semiconductors and devices and products containing the same, including printed circuit boards, automotive parts, and automobiles that infringe patents asserted by the complainant.  The complainant requests that the USITC issue a limited exclusion order and cease and desist orders. 

The USITC has identified the following as the respondents this investigation:

Avnet, Inc. of Phoenix, AZ;

Digi-Key Electronics of Thief River Falls, MN;

Mercedes-Benz Group AG of Stuttgart, Germany;

Mercedes-Benz AG, of Stuttgart-Möhringen, Germany;

Mercedes-Benz USA, LLC of Sandy Springs, GA;

Mouser Electronics, Inc. of Mansfield, TX;

Newark of Chicago, IL;

NXP Semiconductors N.V. of Eindhoven, Netherlands;

NXP USA, Inc. of Austin, TX;

By instituting this investigation (337-TA-XXXX), the USITC has not yet made any decision on the merits of the case.  The USITC’s Chief Administrative Law Judge will assign the case to one of the USITC’s administrative law judges (ALJ), who will schedule and hold an evidentiary hearing.  The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.

The USITC will make a final determination in the investigation at the earliest practicable time.  Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation.  USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

The U.S. International Trade Commission (USITC) has voted to institute an investigation of certain variable valve actuation devices and automobiles containing the same.  The products at issue in the investigation include certain types of valves that open and close with variable timing that are typically found in combustion automobile engines and vehicles with such engines.

The investigation is based on a complaint filed by Jacobs Vehicle Systems Inc. of Bloomfield, CT, on March 10, 2015.  The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain variable valve actuation devices and automobiles containing the same that infringe patents asserted by the complainant.  The complainant requests that the USITC issue a limited exclusion order and a cease and desist order.

The USITC has identified the following as respondents in this investigation:

FCA US LLC of Auburn Hills, MI;
FCA México, S.A. de C.V. of Santa Fe, México;
Sata-Società Automobilistica Tecnologie Avanzate S.p.A. of Melfi Potenza Italy;
Fiat Automobili Srbija Doo of Kragujevac, Serbia; and
Fiat Chrysler Automobiles N.V. of Slough, United Kingdom.

By instituting this investigation (337-TA-954), the USITC has not yet made any decision on the merits of the case.  The USITC’s Chief Administrative Law Judge will assign the case to one of the USITC’s administrative law judges (ALJ), who will schedule and hold an evidentiary hearing.  The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.

The USITC will make a final determination in the investigation at the earliest practicable time.  Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation.  USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

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