Three major American automakers—General Motors, Ford, and Stellantis—are fighting a new trade deal between the United States and the United Kingdom negotiated by President Donald Trump. In a strongly worded letter, the American Automotive Policy Council, which represents the three manufacturers, stated the deal will harm the U.S. auto industry, its workers, and suppliers.
Under the new deal, the UK will be allowed to export up to 100,000 vehicles annually to the United States at a 10% tariff rate. That number closely matches the UK’s total exports to the U.S. last year. However, this tariff is notably lower than the 25% rate imposed on vehicles imported from most other countries, including U.S. trade partners Mexico and Canada.
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“Unfair disadvantage” for North American automakers
“This agreement skews the playing field,” the AAPC said in a statement. “It will now be cheaper to import a UK vehicle with minimal U.S. content than to import a USMCA-compliant vehicle from Mexico or Canada that has 50% American content.” Such an action undermines the very premise of the United States-Mexico-Canada Agreement (USMCA), which was designed to promote regional content and production.
The council feared that this agreement would serve as a model for trade agreements with other nations, further disadvantaging North American vehicle production. “We hope that this preferential access for UK vehicles over North American vehicles is not a precedent for negotiations with Asian and European competitors,” it stated.
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Tariffs remain a burden despite some relief
Although Trump recently rolled back tariffs on auto materials and parts, he left a 25% tariff on imported cars. Continued duty-free treatment of parts qualified under USMCA rules does not seem to soothe the concerns of their domestic counterparts, heavily dependent on complex cross-border supply chains.
The administration has not publicly commented about the criticism received from the automakers.
The financial toll on automakers
The financial impact of Trump’s trade policies is already being borne. Ford announced this week that it had raised prices on certain Mexican-made models due to the tariffs. The company predicts the trade war will cost it around $2.5 billion in 2025, though it is hoping to reduce that expense by about $1 billion.
General Motors presented the same case, estimating that it would cost it $4 billion to $5 billion in tariffs. The company said it expected to offset about 30% of that impact with various countermeasures. Toyota, while not one of the Detroit Three but another large automaker, also estimated that it would face around $1.2 billion in added costs in April and May alone.
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Looking ahead
The auto industry is holding its breath to find out whether this agreement is an isolated exception or the beginning of a new trade policy that privileges certain foreign partners over U.S.-based production. As automakers strain to coordinate a complicated global market, the agreement’s long-term effects could be monumental.
