Part's Mexican Origin Not Enough to Get USMCA Benefits if Heading to OEM, CBP Says
Heavy truck parts destined for a U.S. assembly plant cannot qualify for USMCA benefits under tariff shift rules, CBP told Mitsubishi Electric's Automotive division. Under USMCA, the original equipment starter must have 60% North American content under a net cost method, or 70% under a transaction value method; that percentage will go up in July 2024 to 64% or 74%, respectively, and 70% or 80% in 2027.
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The ruling, dated Sept. 30, and posted online Oct. 7, said that the electric starter, under subheading 8511.40, does qualify for USMCA benefits if it is coming into the U.S. as an aftermarket part. That's because while the assembly in Mexico does include some imported components, the work in Mexico is substantial enough to create a tariff shift. But qualifying as a Mexican part due to a tariff shift is not enough to meet the USMCA auto rules of origin, including for heavy trucks.
The duty rate on this sort of starter originating in Mexico is 2.5%.
Mitsubishi Electric declined to comment when asked if the part has enough North American content to qualify under the regional value content rules.