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Trade Compliance at What Cost? Lessons from USMCA Automotive Trade, Accessible Data
Figure 1. Automotive Product Import Shares, 2015–24
Figure 1 displays annual shares of total imports for Canada (left panel) and Mexico (right panel) accounted for by three different categories of automotive products (passenger cars on the bottom in dark blue; trucks, buses, and special purpose vehicles in the middle in medium blue; and parts on top in light blue). These shares are displayed for each year 2015 through 2024. Mexico has a higher overall automotive product import share than Canada in each year. For Canada, the majority of automotive product imports is consistently passenger cars, while for Mexico, the majority is consistently parts. For both countries, there is a decline in the total automotive product import share following 2020 that begins increasing in 2023.
Note: This figure displays the share of automotive product imports from Canada and Mexico. Product groups are defined using end-use commodity classification. Legend key in order from bottom to top. Numbers inside each bar are rounded to the nearest integer.
Source: Authors’ calculations using U.S. Census Bureau USA Trade Online.
Figure 2. Compliance Shares by Origin Country, 2015–24
Figure 2 displays semi-annual shares of automotive product imports that comply with preferential trade agreements (green lines) coming from Canada (left panel) and Mexico (right panel) between 2015 and 2024. Before the North American Free Trade Agreement (NAFTA) was replaced with the United States-Mexico-Canada Agreement (USMCA) in July 2020, compliance shares hovered around 95 percent for Canada and around 85 percent for Mexico. Starting around July 2020, compliances shares for both countries drop noticeably and partially recover around 2023 and 2024.
Note: This figure plots automotive import compliance shares by origin country in 6-month intervals.
Source: Authors’ calculations using U.S. Census Bureau USA Trade Online.
Figure 3. Compliance Shares by Product Group and Origin Country, 2015–24
Figure 3 displays semi-annual shares of automotive product imports that comply with preferential trade agreements coming from Canada (left panel) and Mexico (right panel) between 2015 and 2024, split by product categories within automotive products. Passenger cars (green lines) were at nearly full compliance for both countries before the North American Free Trade Agreement (NAFTA) was replaced with the United States-Mexico-Canada Agreement (USMCA) in July 2020 but fell after that for Mexico only. Trucks, buses, and special purpose vehicles (light blue lines) were at nearly full compliance over the whole time period for Mexico. For Canada, though, they were hovering around 85 percent compliance pre-USMCA, then dropped slightly around implementation of the USMCA before returning to pre-USMCA levels by the end of 2022. Auto parts (dark blue lines) compliance share pre-USMCA was around 85 percent for imports originating from Canada and around 70 percent for imports originating from Mexico and declined for both countries post-USMCA.
Notes: This chart plots automotive import compliance share by broad product groups and origin country in 6-month intervals.
Source: Authors’ calculations using U.S. Census Bureau USA Trade Online.
Figure 4. Compliance Shares by Most-Favored-Nation Tariff Rate Bins and Country, 2015–24
Figure 4 displays semi-annual shares of automotive product imports that comply with preferential trade agreements coming from Canada (left panel) and Mexico (right panel) between 2015 and 2024, split by products’ most-favored-nation tariff rates. Products with a 25 percent tariff rate (purple lines) are consistently at near full compliance for both countries over the whole time period. Products with a tariff rate between 2.7 percent and 6.4 percent (dark blue lines) have a slightly lower level of compliance but similarly exhibit little change in compliance over the time period. Products with a 2.5 percent tariff rate (light blue lines) have very similar levels of compliance as those with a tariff rate between 2.6 percent and 6.4 percent before the North American Free Trade Agreement (NAFTA) was replaced with the United States-Mexico-Canada Agreement (USMCA) in July 2020 but exhibit a slight decline in compliance post-USMCA. This decline is larger for products imported from Mexico than for those imported from Canada. Products with a tariff rate between 1.4 percent and 2.3 percent (green lines) have slightly lower pre-USMCA compliance shares than products with a 2.5 percent tariff rate and exhibit a steeper decline in compliance post-USMCA.
Notes: This figure plots automotive import compliance share by tariff bins and origin country in 6-month intervals.
Source: Authors’ calculations using U.S. Census Bureau USA Trade Online and U.S. International Trade Commission Tariff Database.
Figure 5. Estimated Additional Compliance Costs in 2025, by Industry
Figure 5 displays implied annual additional costs of complying with the new 2025 tariff actions by three-digit NAICS industry, using estimates of ad valorem tariff equivalent compliance cost of either 1.4 percent (dark blue bars on the left for each industry) or 2.5 percent (light blue bars on the right for each industry). The top three industries that face the highest potential additional compliance costs are computers and electronics; transportation equipment; and chemicals.
Note: This figure displays estimates of additional annual compliance costs in 2025 (in million USD), calculated as the product of our estimate of ad valorem tariff equivalent cost of compliance (1.4 percent for dark blue bars, 2.5 percent for light blue bars) and the total import value by industry using 2024 trade patterns. The industries are ranked by decreasing order of cost. An industry is defined as a 3-digit North American Industrial Classification System (NAICS). Legend key in order from left to right.
Source: Authors’ calculations using U.S. Census Bureau USA Trade Online.