Automotive
The Detroit Three should not holding back of their response to a newly announced trade agreement between former President Donald Trump and the UK. In a rare moment of unity, General Motors, Ford, and Stellantis—speaking through their joint lobbying group, the American Automotive Policy Council—have criticized the deal for giving British-built vehicles what they call an unfair advantage within the U.S. market.
At the center of the problem is a provision within the agreement that enables British carmakers to export as much as 100,000 vehicles annually to the US at a ten% tariff rate. While that number mirrors the whole British exports to the U.S. last 12 months, it stands out starkly against the 25% tariff rate still applied to vehicles coming from Mexico and Canada. Those two countries, each a part of the USMCA trade bloc with the U.S., have much deeper economic and manufacturing ties with American automakers. Yet under the present terms, cars made within the UK with minimal American content could soon be cheaper to import than USMCA-compliant vehicles that include significantly more U.S.-sourced parts.
“This hurts American automakers, suppliers, and auto staff,” the AAPC said in a press release, warning that this agreement not only disrupts North American supply chains but could also function a dangerous template for future deals with Asian or European countries.
The priority isn’t nearly this one-off deal. U.S. automakers fear the move signals a shift away from the USMCA’s rigorously structured balance and toward a looser, more politically motivated trade environment. If the UK deal becomes a model, vehicles assembled in Mexico or Canada—longtime cornerstones of American automobile production—could find themselves at an obstacle to vehicles with little or no U.S. content.
Despite this blowback, the Trump administration has yet to reply publicly. The White House offered no comment when asked concerning the industry’s concerns.
It’s price noting that Trump has made some concessions to ease pressure on the industry, including exemptions on certain parts and materials utilized in manufacturing. Nonetheless, the cornerstone 25% tariff on imported vehicles stays firmly in place. This has forced automakers to make some tough pricing decisions.
Ford, as an illustration, recently raised prices on a few of its Mexican-built vehicles and expects Trump’s trade actions so as to add around $2.5 billion in extra costs for 2025. The corporate is working to cut back that exposure by about $1 billion. GM projects an excellent higher hit, estimating between $4 and $5 billion in tariff-related expenses, though it plans to offset roughly 30% of that. Toyota, one other major player with global operations, said its tariff burden for just April and May would total roughly $1.2 billion.
The message from Detroit is evident. Automakers are willing to adapt, but they need a level playing field. Preferential deals just like the UK agreement threaten the fragile balance they’ve built across North America over many years. With more trade negotiations likely on the horizon, this pushback could possibly be the primary sign of a growing resistance from an industry not desperate to grow to be a pawn in geopolitical strategy.
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This Article First Appeared At www.automotiveaddicts.com
