The United States has suspended liquidation of unliquidated entries of merchandise from a Mexican automotive textile facility while Mexico is asked to review allegations that workers were denied freedom of association and collective bargaining rights.
On October 13, 2026, the Office of the United States Trade Representative (USTR) invoked the United States-Mexico-Canada Agreement (USMCA) Rapid Response Labor Mechanism concerning Carolina Performance Fabrics, S.A. de C.V., in Salvatierra, Guanajuato, Mexico.
The facility manufactures specialized, high-performance textiles for the automotive industry.
What Triggered the USMCA Review?
The action followed a petition submitted on September 10, 2026, by a Mexican union affiliated with the Confederación Central Nacional (COCENA).
According to USTR, the petition alleges that the facility interfered with union activity and retaliated against workers attempting to organize. The allegations include harassment, threats and unlawful dismissals.
After reviewing the petition and accompanying information, the U.S. Interagency Labor Committee for Monitoring and Enforcement, which USTR co-chairs with the Department of Labor, determined that sufficient, credible evidence existed to invoke the USMCA enforcement mechanism in good faith.
USTR then asked Mexico, under Annex 31-A of the USMCA, to review whether workers at the facility are being denied covered labor rights.
Mexico has until October 23 (10 days from the request) to agree to conduct the review. If Mexico agrees, it has 45 days from the date of the request to complete it, which runs through November 27.
The allegations have not yet been resolved through the Rapid Response Labor Mechanism.
What Does Suspended Liquidation Mean?
USTR also directed the Treasury Department to suspend liquidation of unliquidated entries of goods from the Carolina facility. USTR acted under Section 752(a) of the USMCA Implementation Act, and its letter to Treasury covers all unliquidated entries of goods produced at the facility.
Suspended liquidation is not the same as an import ban or detention.
The merchandise may continue moving through the entry process unless another restriction applies, but CBP will not finalize the affected entry while liquidation remains suspended. Final duty liability and entry treatment therefore remain open. Once USTR notifies Treasury that the suspension has been lifted, CBP generally has six months to liquidate the affected entries.
For importers, this can create:
- Uncertainty regarding final duty liability
- Entry records that must stay readily accessible while entries remain open
- Additional administrative monitoring
- Delayed refunds that otherwise might be issued at liquidation
- A need to maintain financial reserves
- Difficulty closing internal accounting records
- Potential exposure to future remedial action
Companies should not assume that the issue applies only to businesses purchasing directly from the named facility. Automotive textiles can move through converters, distributors, component manufacturers and tiered supplier networks before reaching the U.S. importer.
Importers Should Identify Facility-Level Exposure
A commercial invoice naming a Mexican exporter may not identify the facility where the textile was produced.
Importers should work with suppliers to determine whether merchandise in current or past unliquidated entries was manufactured at the Carolina Performance Fabrics facility in Salvatierra.
Relevant records may include:
- Purchase orders
- Commercial invoices
- Manufacturer affidavits
- Production records
- Packing lists
- Bills of materials
- Lot or batch records
- Mill certificates
- Supplier declarations
- Transportation and delivery records
The review should focus on facility identity, not simply the country of origin or name of the immediate seller.
Customs brokers should also avoid making assumptions based solely on the exporter shown in the entry data. The importer may need to obtain additional upstream information before determining whether an entry is affected.
Labor Enforcement Now Carries Direct Customs Consequences
The USMCA Rapid Response Labor Mechanism allows the United States and Mexico to address alleged denials of collective-bargaining and freedom-of-association rights at particular facilities.
For importers, the Carolina action demonstrates that labor enforcement is not limited to employment-law or supplier-code concerns. It can directly affect the customs treatment of merchandise produced at a named facility.
The Carolina request is part of a steady run of recent cases. USTR also invoked the mechanism at Yokohama Tire Manufacturing Mexico on September 25 and GLM Components Mexico on October 8. Many earlier matters have closed within a few months, with USTR directing Treasury to resume liquidation once remediation was complete, as it did for Grupo Yazaki in August and Akwel Juárez México in September.
If a denial of rights is established and not remediated, remedies under the mechanism can include suspension of USMCA preferential tariff treatment for the facility’s goods or other penalties, and denial of entry for repeat offenders. The exact outcome in this matter will depend on Mexico’s review and any subsequent agreement or enforcement action.
Importers should therefore incorporate facility-level labor risk into supplier due diligence, particularly in sectors with complex Mexican manufacturing networks.
Steps Importers Should Take Now
Companies that import automotive textiles or products incorporating textiles from Mexico should:
- Determine whether they source directly or indirectly from Carolina Performance Fabrics.
- Identify unliquidated entries containing merchandise produced at the facility.
- Notify customs, finance and legal teams of potentially affected entries.
- Preserve entry, production and supplier records.
- Monitor liquidation status and CBP messaging.
- Avoid filing actions based on an assumption that liquidation will occur on the ordinary schedule.
- Review contracts for supplier disclosure, cooperation and compliance provisions.
- Add facility-level labor-risk questions to supplier onboarding and monitoring.
- Follow USTR announcements for Mexico’s response (due October 23) and any remediation plan.
The action does not establish that every automotive textile product from Mexico is affected. The suspension is tied to merchandise produced at the identified facility.
For additional information, review USTR’s October 13 announcement.
Contact the Alba team for assistance identifying affected entries, reviewing supplier documentation or managing entries subject to suspended liquidation.
Subscribe to the ASK Alba™ Trade Brief for timely updates on USMCA enforcement, customs requirements and cross-border trade.
References
- Office of the United States Trade Representative, United States Seeks Mexico’s Review of Alleged Denial of Workers’ Rights at Carolina Performance Fabrics, October 13, 2026.
- USTR, U.S. Request for Review: Carolina Performance Fabrics, October 13, 2026.
- USTR, Letter to the Secretary of the Treasury Directing Suspension of Liquidation: Carolina Performance Fabrics, October 13, 2026.
- USTR, Chapter 31 Annex A: Facility-Specific Rapid Response Labor Mechanism (case index and remedies overview).
- USMCA, Chapter 31: Dispute Settlement, including Annex 31-A.
- United States-Mexico-Canada Agreement Implementation Act, Pub. L. No. 116-113, Section 752.
