The United States has initiated negotiations with Mexico to mandate that at least 50% of vehicles traded under the USMCA be manufactured in the US. This proposal marks a significant shift from the current agreement, which treats North America as a unified manufacturing bloc. The USMCA, which replaced NAFTA in 2020, already requires 75% regional value content for light vehicles and includes labor value content rules and mandates for North American steel and aluminum. The talks, which began on May 28 and are set to continue until late July 2026, notably exclude Canada. This move coincides with a 25% tariff on auto imports effective since April 2025, which incentivizes sourcing from US factories. US Trade Representative Jamieson Greer emphasizes the proposal as a push to boost domestic manufacturing. The outcome of these negotiations could significantly impact automakers and investors, as compliance with the proposed rules would affect tariff-free access to the US market. Canada's exclusion raises concerns about potential disruptions to the trilateral trade framework. Any agreement between the US and Mexico that disadvantages Canadian auto manufacturing could lead to further negotiations, potentially destabilizing North American trade relations.