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The Single Rule That Made Global Auto Parts Trade Possible
Description
Episode 86 of Global Trade with Fexingo digs into the Harmonized System's rule of origin for auto parts — specifically the 'substantial transformation' test that determines whether a car component qualifies for tariff-free trade. Lucas and Luna walk through a concrete example: a Mexican-made wiring harness assembled from US copper and Chinese connectors. They explain how the change in tariff classification threshold (heading vs. subheading) shifts trade flows worth $1.4 trillion annually, and why the US-Mexico-Canada Agreement's stricter 75% regional value content rule is reshaping North American supply chains in 2026. No abstract theory — just one specific rule that determines whether your car's transmission crosses a border duty-free or faces a 6.1% tariff. Sharp, grounded, and timely for anyone who wants to understand how trade rules actually work.