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) is seeking input for a new factfinding investigation on the USMCA automotive rules of origin (ROOs) and their impact on the U.S. economy, their effect on the competitiveness of U.S. automotive production and trade, and their relevancy in light of technology changes.

The Commission instituted the investigation, USMCA Automotive Rules of Origin: Economic Impact and Operation, 2023 Report (Inv. No. 332-592), for the purpose of preparing the first of five reports for the President and the House Committee on Ways and Means and Senate Committee on Finance as required by section 202A(g)(2) of the United States-Mexico-Canada Agreement Implementation Act.

As required, the USITC, an independent, nonpartisan, factfinding federal agency, will examine the USMCA automotive ROOs and their impact on the United States in an investigation and produce a report. The report will provide information on:

1. the economic impact of the USMCA automotive ROOs on U.S. gross domestic product, trade, employment, and consumers, as well as the economic impact on production, investment, capacity, revenues, wages, and employment in U.S. automotive industries;
2. the operation of the USMCA automotive ROOs and their effect on the competitiveness of U.S. automotive production and trade;
3. the relevancy of the USMCA automotive ROOs in light of recent technology changes in the United States; and
4. other matters the Commission considers relevant to the economic impact of the USMCA automotive ROOs.

The USITC expects to submit its first report to the President and the appropriate Congressional committees no later than Friday, June 30, 2023. The Commission is directed to submit reports on the USMCA automotive ROOs every two years thereafter until 2031.

The USITC will hold a public hearing in connection with the investigation at 9:30 a.m. on November 3, 2022. Information about how to participate in the hearing will be posted on the Commission’s website no later than September 26, 2022, at https://usitc.gov/research_and_analysis/what_we_are_working_on.htm.

Requests to appear at the hearing should be filed no later than 5:15 p.m. on September 30, 2022, with the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436.  See below for important information regarding filing a request to appear at a USITC hearing.

The USITC also welcomes written submissions for the record.  Written submissions should be addressed to the Secretary to the Commission and should be submitted no later than 5:15 p.m. on November 24, 2022. All written submissions, except for confidential business information, will be available for public inspection.  See below for important information regarding the filing of written submissions for USITC investigations.

IMPORTANT:  All filings to appear at the hearing and written submissions must be made through the Commission’s Electronic Document Information System (EDIS, https://edis.usitc.gov). No in-person paper-based filings or paper copies of any electronic filings will be accepted until further notice. Persons with questions regarding electronic filing should contact the Office of the Secretary, Docket Services Division (EDIS3Help@usitc.gov), or consult the Commission’s Handbook on Filing Procedures.

Further information on the scope of the investigation and appropriate submissions is available in the USITC’s notice of investigation, dated August 4, 2022, which can be  downloaded from the USITC Internet site (www.usitc.gov) or may be obtained by contacting the Office of the Secretary at commissionhearings@usitc.gov.

USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted 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 United States International Trade Commission (USITC) is seeking input on a newly initiated investigation concerning a proposed modification to the United States-Korea Free Trade Agreement (KORUS) rules of origin.

The investigation, Certain Fabrics of Triacetate Filament Yarns: Effect of Modification to U.S.-Korea FTA Rules of Origin (Inv. No. U.S.-Korea FTA-103-033) was requested by the U.S. Trade Representative (USTR) in a letter received on July 5, 2022. The letter included an attachment detailing the textile and apparel articles affected by the proposed modification. 

As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will provide advice on the probable economic effect of the proposed KORUS rules of origin modification on U.S. trade under the KORUS, total U.S. trade, and domestic producers of the affected articles.

The USITC expects to submit its advice to the USTR by November 4, 2022. A public version of the report, with all confidential business information deleted, will be released as soon as possible thereafter.

The USITC is seeking input for its new investigation from all interested parties and requests that the information focus on the articles for which the USITC is requested to provide information and advice. The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record. Written submissions should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 and should be submitted at the earliest practical date but no later than 5:15 p.m. on August 26, 2022.

IMPORTANT:  All written submissions must be made through the Commission’s Electronic Document Information System (EDIS, https://edis.usitc.gov). No in-person paper-based filings or paper copies of any electronic filings will be accepted until further notice. Persons with questions regarding electronic filing should contact the Office of the Secretary, Docket Services Division (EDIS3Help@USITC.gov), or consult the Commission’s Handbook on Filing Procedures.

Further information on the scope of the investigation is available in the USITC’s notice of investigation, dated July 21, 2022, which can be downloaded from the USITC Internet site (www.usitc.gov) or may be obtained by contacting the Office of the Secretary at commissionhearings@usitc.gov.

However, USITC Notifies USTR That Two Domestic Producers Filed Objections

Proposed modifications to the United States-Korea Free Trade Agreement (KORUS) rules of origin are likely to have a negligible effect on U.S. imports and U.S. exports, but they could impact the U.S. industry that produces some of the affected articles, reports the United States International Trade Commission (USITC) in its publication U.S.-Korea FTA: Advice on Modifications to Certain Textile and Apparel Rules of Origin.

The USITC, an independent, nonpartisan, factfinding federal agency, produced the report at the request of the U.S. Trade Representative (USTR).

As requested, the report provides advice on the probable economic effect of the proposed modifications to the U.S.-Korea FTA rules of origin on U.S. trade under the agreement, on total U.S. trade, and on domestic production of the affected articles. The proposed modifications, detailed in the USTR's request letter, cover the following of headings of the Harmonized Tariff Schedule of the United States (HTS):

• Certain cotton yarns (under HTS heading 5206) with viscose rayon staple fibers (under HTS subheadings 5504.10 or 5507.00);


• Certain woven fabrics (under HTS heading 5408) with cuprammonium rayon yarns (under HTS subheading 5403.39); and


• Certain apparel (under HTS heading 6110), accessories, and apparel parts (under HTS heading 6117) of cashmere yarns (under HTS heading 5108).

Each of the proposed modifications to the rules of origin would liberalize the current rules of origin by allowing the use of more non-originating materials. However, because U.S. imports from Korea are a small portion of total U.S imports of the affected articles, and because Korea is not a major producer of the affected articles, the likely effect of the proposed modifications on imports under KORUS and on total U.S. imports of these products is negligible.

Similarly, because the United States exported little to none (both in terms of value and as a share of total U.S. exports of these products) of the affected articles to Korea in 2018, the likely effect of the proposed modification on exports under KORUS and on total U.S. exports would be negligible as well.

The Commission received two objections from domestic producers of two of the articles affected by the proposed modification. One domestic producer of cotton yarns with viscose rayon staple fibers objected to the first of the proposed modifications as they produce the end-use product covered by that modification. Another domestic producer of cashmere yarns objected to the third modification as they produce the input covered by that modification.

U.S.-Korea FTA: Advice on Modifications to Certain Textile and Apparel Rules of Origin (Inv. No. FTA-103-032, USITC publication 4917, June 2019) is available at https://www.usitc.gov/sites/default/files/publications/tariff_affairs/pub4917.pdf

The United States International Trade Commission (USITC) is seeking input on a newly initiated investigation concerning proposed modifications of the United States-Korea Free Trade Agreement (KORUS) rules of origin.

The investigation, U.S.-Korea FTA: Advice on Modifications to Certain Textile and Apparel Rules of Origin, was requested by the U.S. Trade Representative (USTR) in a letter received on February 22, 2019.  The letter included an attachment detailing the certain textile and apparel articles affected by the proposed modifications. 

As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will provide advice on the probable economic effect of the proposed U.S.-Korea FTA rules of origin modifications on U.S. trade under the KORUS, total U.S. trade, and on domestic producers of the affected articles.

The USITC expects to submit its advice to the USTR by June 24, 2019. A public version of the report, with all confidential business information deleted, will be released as soon as possible thereafter.

The USITC is seeking input for its new investigation from all interested parties and requests that the information focus on the articles for which the USITC is requested to provide information and advice. The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record. Written submissions should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 and should be submitted at the earliest practical date but no later than 5:15 p.m. on March 29, 2019.

Further information on the scope of this investigation, the proposed rules of origin modifications, and the procedures for written submissions is available in the USITC's notice of investigation, dated March 11, 2019, which can be obtained from the USITC Internet site (www.usitc.gov) or by contacting the Secretary at the above address.

The proposed modifications to the United States-Morocco Free Trade Agreement (U.S.-Morocco FTA) rules of origin are likely to have a negligible effect on U.S. imports from Morocco, total U.S. trade and U.S. industry, reports the U.S. International Trade Commission (USITC) in its publication, Probable Economic Effect of Certain Modifications to the U.S.-Morocco FTA Rules of Origin.

The USITC, an independent, nonpartisan, factfinding federal agency, produced the report at the request of the U.S. Trade Representative (USTR).

As requested, the report provides advice on the probable economic effects of the proposed modifications to the U.S.-Morocco FTA rules of origin on U.S. trade under the U.S.-Morocco FTA, on total U.S. trade, and on domestic producers of certain textile and apparel articles. Specifically, the proposed modifications cover women’s and girl’s dresses, skirts, blouses, tops, shirts, shirt-blouses, and pants.

Probable Economic Effect of Certain Modifications to the U.S.-Morocco FTA Rules of Origin (Inv. No. U.S.-Morocco FTA 103-030, USITC Publication 4662, February 2017) is available at https://www.usitc.gov/publications/332/pub4662.pdf.

Proposed modifications to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) rules of origin are likely to have negligible effects on total U.S. trade and U.S. industry, reports the United States International Trade Commission (USITC) in its publication Probable Economic Effects of Certain Modifications to the CAFTA-DR Rules of Origin.

The USITC, an independent, nonpartisan, factfinding federal agency, produced the report at the request of the U.S. Trade Representative (USTR).

As requested, the report provides advice on the probable economic effects of the proposed modifications to the CAFTA-DR rules of origin on U.S. trade under CAFTA-DR, on total U.S. trade, and on domestic producers of the affected articles.  The proposed modifications, detailed in the USTR’s request letter, cover chemical products, polyvinyl chloride and other plastics, gaming machines, and fishing lures.

The proposed modification for the rule of origin for fishing lures could result in a significant increase in U.S. imports of fishing lures from CAFTA-DR partner countries.  However, because U.S. imports from CAFTA-DR countries are a small portion of total U.S imports of fishing lures, the effect on total U.S. imports of these products is likely negligible. For all other products, the likely effects on U.S. imports from CAFTA-DR partner countries are negligible.

Probable Economic Effects of Certain Modifications to the CAFTA-DR Rules of Origin (Inv. No. CAFTA-DR-103-028, USITC publication 4613, June 2016) is available at https://www.usitc.gov/publications/332/pub4613.pdf.

USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted 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 requestor. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requestor for national security reasons.

The United States International Trade Commission (USITC) is seeking input on a new investigation concerning proposed modifications to the United States-Chile Free Trade Agreement (FTA) rules of origin.

The investigation, Probable Economic Effect of Certain Modifications to the U.S.-Chile FTA Rules of Origin, was requested by the U.S. Trade Representative (USTR) in a letter received on May 24, 2016.  The letter included an attachment detailing the articles affected by the proposed modifications.  The request covers woven fabric of artificial filament yarns.

As requested by the USTR, the USITC, an independent, nonpartisan, factfinding federal agency, will provide advice on the probable economic effect of the proposed U.S.-Chile FTA rules of origin modifications on U.S. trade under the Agreement, total U.S. trade, and on domestic producers of the affected articles.

The USITC expects to submit its advice to the USTR by August 24, 2016.  A public version of the report, with all confidential business information deleted, will be released as soon as possible thereafter.

The USITC is seeking input for its new investigation from all interested parties and requests that the information focus on the articles for which the USITC is requested to provide information and advice. The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record. Written submissions should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 and should be submitted at the earliest practical date but no later than 5:15 p.m. on July 11, 2016.

Further information on the scope of this investigation, the proposed rules of origin modifications, and the procedures for written submissions is available in the USITC's notice of investigation, dated June 16, 2016, which can be downloaded from the USITC Internet site (www.usitc.gov) or by contacting the Secretary at the above address.

The United States International Trade Commission (USITC) is seeking input on a newly initiated investigation concerning proposed modifications to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) rules of origin.

The investigation, Probable Economic Effects of Certain Modifications to the CAFTA-DR Rules of Origin, was requested by the U.S. Trade Representative (USTR) in a letter received on November 24, 2015.  The letter included an attachment detailing the articles affected by the proposed modifications.   The request covers fishing lures, gaming machines, polyvinyl chloride, and certain products of the chemical and allied industries.

As requested by the USTR, the USITC, an independent, nonpartisan, factfinding federal agency, will provide advice on the probable economic effects of the proposed CAFTA-DR rules of origin modifications on U.S. trade under the Agreement, total U.S. trade, and on domestic producers of the affected articles.

The USITC expects to submit its advice to the USTR by May 24, 2016.  A public version of the report, with all confidential business information deleted, will be released as soon as possible thereafter.

The USITC is seeking input for its new investigation from all interested parties and requests that the information focus on the articles for which the USITC is requested to provide information and advice. The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record. Written submissions should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 and should be submitted at the earliest practical date but no later than 5:15 p.m. on January 25, 2016.

Further information on the scope of this investigation, the proposed rules of origin modifications, and the procedures for written submissions is available in the USITC's notice of investigation, dated December 14, 2015, which can be downloaded from the USITC Internet site (www.usitc.gov) or by contacting the Secretary at the above address.

The United States International Trade Commission (USITC) is seeking input for a newly initiated investigation on the effect of correcting the U.S.-Korea Free Trade Agreement product-specific rules of origin.

The investigation, Effect of Adding References to HS 6104.32 to Correct the U.S.-Korea Product-Specific Rules of Origin, was requested by the U.S. Trade Representative (USTR) in a letter received on March 22, 2012.

As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will provide advice on the probable effect on U.S. trade under the FTA and total U.S. trade of correcting the U.S.-Korea product-specific rules of origin by adding references to HS 6104.32. HS 6104.32 covers women's or girls' knit cotton suit-type jackets and blazers. The USTR explained in his request letter that HS 6104.32 had been inadvertently omitted from both the English and Korean language versions of the FTA through a clerical error. The USTR's request letter can be viewed at: http://www.usitc.gov/research_and_analysis/ongoing/documents/Request_Letter_103-026_KORUS_HTS_Correction.pdf.

The USITC expects to submit its advice to the USTR by May 22, 2012.

The USITC is seeking input for its new investigation from all interested parties and requests that the information focus on the articles for which the USITC is requested to provide information and advice. The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record. Written submissions should be addressed to the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 and should be submitted at the earliest practical date but no later than 5:15 p.m. on April 18, 2012.

Further information on the scope of this investigation and the procedures for written submissions is available in the USITC's notice of investigation, dated March 26, 2012, which can be downloaded from the USITC Internet site (www.usitc.gov) or by contacting the Secretary at the above address.

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