Background on the Semiconductor Industry and T-MEC
The semiconductor industry in the United States is a significant contributor to the country’s economy, with historical export success and substantial trade surpluses in sectors like semiconductors for nearly three decades. The Transpacific Trade Agreement (T-MEC) is a crucial trade agreement between Mexico, the United States, and Canada.
Industry’s Request for Rule of Origin Adjustments
The Semiconductor Industry Association (SIA) has urged the U.S. government to consider adjustments in the rules of origin for the semiconductor sector within the T-MEC framework. The aim is to boost competitiveness and investments in North America, with Mexico being a key market for semiconductor manufacturers.
Mexico’s Current Market Conditions
Mexico plays a significant role in the semiconductor industry’s landscape. It is the primary destination for U.S. semiconductor exports, and its sales to the American market have plummeted by 51.5% from January to July 2025. Moreover, both countries’ governments are actively promoting joint production.
SIA’s Recommendations
In a letter to the U.S. Trade Representative’s Office (USTR), SIA proposed that adapted rules of origin could foster the integration of U.S. semiconductors into various finished products manufactured in North America. They emphasized the importance of meaningful consultations with strategic sectors, including semiconductors, if any changes to the rules of origin and related calculations are considered during the review process.
Industry’s Impact and Trade Statistics
SIA members represent over 99% of the U.S. semiconductor industry by revenue and include major chip companies from other countries. They are involved in all stages of semiconductor production, from research and design to manufacturing, assembly, testing, and packaging. Historically, semiconductors have been a major U.S. export sector with considerable trade surpluses.
In 2024, the U.S. maintained significant trade surpluses in semiconductors with both Canada and Mexico, totaling $745 million and $10.682 billion, respectively.
SIA’s Key Points for T-MEC Rule of Origin
SIA urged negotiators to ensure that T-MEC rules of origin strengthen U.S. semiconductor competitiveness, encourage more investment in North American supply chains, and account for differences between existing and planned operations for various semiconductor production types.
Realistic Implementation Timeline
SIA stressed the need for a realistic timeline for implementing and complying with any rule of origin changes by U.S. companies. They also supported the Trump Administration’s goal to discourage integration of goods from countries raising concerns in T-MEC compliant products.
Collaboration for Economic Security
SIA views T-MEC as a platform to enhance harmonization and collaboration on economic security matters while maintaining and strengthening U.S. tech trade competitiveness globally, including coordination to prevent third-party countries from using the agreement to evade tariffs.
Key Questions and Answers
- What is the semiconductor industry’s request? The Semiconductor Industry Association (SIA) has asked for adjustments to the rules of origin in the T-MEC to boost competitiveness and investments in North America.
- Why is Mexico significant for the U.S. semiconductor industry? Mexico is the primary destination for U.S. semiconductor exports, and its market conditions are crucial for the industry’s growth.
- What does SIA recommend regarding T-MEC rule of origin changes? SIA recommends meaningful consultations with strategic sectors, including semiconductors, and a realistic timeline for implementing any changes.
- How does SIA view T-MEC in terms of economic security? SIA sees T-MEC as a platform to enhance harmonization and collaboration on economic security matters while maintaining U.S. tech trade competitiveness globally.
