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Auto industry may avoid compliance penalties under USMCA for a year

WASHINGTON — Automakers and their suppliers may be able to escape penalties for compliance infractions for up to a year under a new North American trade deal that takes effect Wednesday, a U.S. Customs and Border Protection official said Tuesday.

The U.S.-Mexico-Canada Agreement requires that for tariff-free access, vehicles must contain 75 percent North American content by value, up from 62.5 percent under the 26-year-old North American Free Trade Agreement, which it replaces. The USMCA also requires that 40 percent to 45 percent of a vehicle’s value come from “high wage” areas, namely the United States and Canada.

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