automobile
In their response to a newly announced trade agreement between the former President Donald Trump and the United Kingdom, the three Detroit Three do not hold back. In a rare moment of unit, General Motors, Ford and Stellatis spokesman, the American Automotive Policy Council, criticized the deal to give the British vehicles an unfair advantage on the US market.
The focus of the problem is a provision in the agreement that enables British car manufacturers to export up to 100,000 vehicles to the USA annually with a tariff set of 10%. This number reflects the entire British exports to the United States last year, but is strongly against the 25% tariff quota, which is still used for vehicles from Mexico and Canada. These two countries, both part of the USMCA trading block with the USA, have much deeper economic and manufacturing relationships with American car manufacturers. Under the current conditions, cars that were produced in Great Britain with minimal American content could soon be imported cheaper than USMCA-compliant vehicles that contain significantly more parts of the United States.
“This harms American car manufacturers, suppliers and car workers,” said the AAPC in a statement and warned that this agreement not only disturbs North American supply chains, but could also serve as a dangerous template for future business with Asian or European countries.
The concern is not just about this unique deal. US car manufacturers fear that the move will be a removing the carefully structured balance of the USMCA to a relaxed, politically motivated trade environment. When the British deal becomes a model, vehicles that are gathered in Mexico or Canada – long times of American automotive production – can be disadvantage for vehicles with little or no US content.
Despite this conclusion, the Trump government still has to react publicly. The White House did not offer a comment when he was asked about the concerns of the industry.
It is worth noting that Trump has made some concessions to reduce the pressure on the industry, including exceptions for certain parts and materials used in production. However, the cornerstone of 25% for imported vehicles remains determined. This has forced car manufacturers to make some difficult price decisions.
Ford, for example, recently increased prices for some of his Mexican vehicles and expects Trump’s trading campaigns for 2025 additional costs of around $ 2.5 billion. The company is working on reducing this commitment by about $ 1 billion. GM projects an even higher hit and estimates the expenses in connection with tariffs between $ 4 and $ 5 billion, although it plans to compensate for around 30% of them. Toyota, another important player at global operation, said that his tariff load for April and May would be about 1.2 billion US dollars as a whole.
The message from Detroit is clear. Car manufacturers are ready to adapt, but want a flat playing field. Preferences such as the agreement of Great Britain threaten the sensitive balance that they have built up in all of North America for decades. With more trade negotiations in the horizon, this setback could be the first sign of growing resistance from an industry that is not striving to become a farmer in the geopolitical strategy.
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