The United States has begun a review of the United States-Mexico-Canada Agreement (USMCA), and Korean companies that have been exporting to America tariff-free under this agreement are urging for its maintenance.
Samsung Electronics, in an opinion submitted to the U.S. Trade Representative’s website, emphasized that the USMCA has played a significant role in North American investments and establishing an integrated supply chain. The company urged the U.S. to reaffirm the principle of tariff exemptions for products that meet USMCA standards. Samsung Electronics produces TVs, monitors, and home appliances in Mexico, which are also exported to the U.S.
Similarly, LG Electronics, which produces home appliances and auto parts in Mexico, requested that auto parts meeting USMCA standards be exempt from the 50% steel and aluminum tariff.
Hyundai Motor Group urged the U.S. to reaffirm its long-term commitment to the USMCA to ensure investor confidence, economic security, and sustained competitiveness in North America.
LG Energy Solutions, involved in producing battery modules at a Canadian joint venture, stated that the USMCA is a significant consideration in establishing an advanced battery supply chain in North America and urged the U.S. to prioritize the agreement’s maintenance and continuity. They also pointed out that the complex rules of origin of the USMCA already impose significant administrative burdens on companies, and further strengthening of battery origin standards should be avoided.
The USMCA, negotiated during the first Trump administration and effective in 2020, requires a joint review by the three countries in 2026 to decide on its extension. If not extended, it will be terminated in 2036. Currently, the Trump administration is in the process of gathering stakeholder opinions ahead of the scheduled USMCA joint review on July 1st of next year and plans to hold a public hearing from December 3-5.
The industry is concerned that due to President Trump’s dissatisfaction with the trade situation with Mexico and Canada, he may seek significant changes to the USMCA or opt against its extension. This could increase tariff burdens for companies exporting products manufactured in Mexico and Canada to the U.S. and disrupt supply chain strategies.
For example, USMCA provides tariff-free benefits to products with a certain percentage of procurement within the three countries. If President Trump demands an increase in procurement within the U.S., products manufactured in Mexico and Canada might lose their tariff-free status.
There is speculation that President Trump, who prefers bilateral negotiations over multilateral talks, might render the USMCA ineffective, similar to the Korea-U.S. FTA, by negotiating separate trade agreements with Mexico and Canada rather than extending the USMCA.
In a meeting with Canadian Prime Minister Mark Carney on the 7th, President Trump stated that the USMCA could be renegotiated or “alternatively, we could just make a different agreement.”
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