Concerns Over US-UK Auto Trade Agreement

Representatives from General Motors, Ford, and Stellantis have raised alarms about a new trade agreement with the UK, arguing it could upend former President Trump’s trade policies and negatively impact the U.S. auto industry.

The agreement allows British automakers to export 100,000 vehicles annually to the U.S. at significantly reduced tariff rates, which contrasts sharply with the 25% tariff applied to cars from Mexico, Canada, and nearly all other nations.

According to the American Auto Policy Council—representing several Detroit automakers—this new deal would make it more financially viable to import UK vehicles with minimal U.S. content than to source compliant vehicles from Mexico or Canada. This, they argue, is detrimental to American manufacturers, suppliers, and workers.

Automakers in the U.S. worry that this approach to trade could serve as a model for future agreements, potentially disadvantaging vehicles manufactured in Canada and Mexico. The White House has yet to respond to these concerns.

In their statement, the American Auto Policy Council expressed hope that this preferential treatment for UK vehicles won’t influence negotiations with competitors from Asia or Europe in the future.

Last month, Trump attempted to soften the impact of tariffs by adjusting the duties on auto parts and materials, but he maintained a 25% tariff on imported vehicles. He also continued the tax exemption for North American parts consistent with the US-Mexico-Canada Trade Agreement (USMCA).

Automakers are hopeful that Trump might reconsider the tariffs imposed on vehicles.

Ford disclosed this week that it has raised prices on Mexican-produced cars due to the tariffs, estimating that Trump’s trade policies could result in an additional $2.5 billion in costs by 2025. However, the company anticipates a savings of about $1 billion through other adjustments.

GM estimates that the tariffs could lead to costs ranging from $4 billion to $5 billion but expects to offset at least 30% of those expenses. Meanwhile, Toyota projected tariffs will amount to around $1.2 billion through April and May.