02:43 PM EDT, 06/05/2026 (MT Newswires) -- The US is proposing stricter rules for car parts amid trade talks with Mexico to reduce North America's reliance on imported Chinese components, the Financial Times reported Friday, citing people familiar with the matter.

The Trump administration is demanding that more car parts, including electronics that are usually imported from China, be sourced in North America for the fully assembled vehicle to pass for duty-free treatment, the report said.

The talks come ahead of the July 1 deadline for the US, Mexico and Canada to decide whether to renew the 2020 USMCA trade agreement for 16 years or move to annual reviews, according to the report.

The three countries are unlikely to reach any kind of deal for at least several months, the media outlet added.

The US trade representative's office did not immediately respond to MT Newswires' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)