In a submission reflective of general domestic industry concerns, the Alliance for American Manufacturing (AAM) pointed to China’s strategic exploitation of the USMCA via Mexico. The group stated that the agreement has inadvertently funneled significant “backdoor” benefits to China, with Chinese firms using Mexico as a base to evade U.S. tariffs and exploit rules-of-origin loopholes to import goods duty-free. It argued for action to stop these trends, saying that without “a more robust response by Mexico, gaps in the USMCA’s rules of origin will continue to accelerate a structural shift in wealth and production from the United States to China via Mexico,” which “undermines the agreement’s intent, distorts North American supply chains, displaces U.S. jobs, and erodes the foundation of U.S. manufacturing and national security.”

…

Outside the context of the formal USMCA review, Oren Cass, a conservative commentator who is influential within the Trump administration, argued in a Financial Times piece that a new USMCA should emphasize “sovereign control rather than the physical presence of companies and a common external boundary rather than global integration.” In this regard, he noted that under existing rules, if Chinese automaker BYD “set up shop in Mexico and produced under USMCA-negotiated rules, its cars were welcome in the US market.” However, he noted, “BYD building in Mexico does not alter the fact that it is controlled and subsidized by the Chinese Communist party.” To address this vulnerability, he advocates that the three North American allies “jointly commit to a policy of ‘China out,’ and extend it to other countries that integrate their supply chains with China’s.”