Automotive
The Detroit Three are not holding back in their response to a newly announced trade agreement between former President Donald Trump and the United Kingdom. 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 in the U.S. market.
At the heart of the issue is a provision in the agreement that allows British carmakers to export up to 100,000 vehicles annually to the United States at a 10% tariff rate. While that number mirrors the total British exports to the U.S. last year, it stands out starkly against the 25% tariff rate still applied to vehicles coming from Mexico and Canada. Those two countries, both part of the USMCA trade bloc with the U.S., have much deeper economic and manufacturing ties with American automakers. Yet under the current terms, cars made in 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 workers,” the AAPC said in a statement, warning that this agreement not only disrupts North American supply chains but could also serve as a dangerous template for future deals with Asian or European countries.
The concern isn’t just about this one-off deal. U.S. automakers fear the move signals a shift away from the USMCA’s carefully 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 car production—could find themselves at a disadvantage to vehicles with little or no U.S. content.
Despite this blowback, the Trump administration has yet to respond publicly. The White House offered no comment when asked about the industry’s concerns.
It’s worth noting that Trump has made some concessions to ease pressure on the industry, including exemptions on certain parts and materials used in manufacturing. However, the cornerstone 25% tariff on imported vehicles remains firmly in place. This has forced automakers to make some tough pricing decisions.
Ford, for instance, recently raised prices on some of its Mexican-built vehicles and expects Trump’s trade actions to add around $2.5 billion in extra costs for 2025. The company is working to reduce that exposure by about $1 billion. GM projects an even higher hit, estimating between $4 and $5 billion in tariff-related expenses, though it plans to offset roughly 30% of that. Toyota, another major player with global operations, said its tariff burden for just April and May would total approximately $1.2 billion.
The message from Detroit is clear. Automakers are willing to adapt, but they want a level playing field. Preferential deals like the UK agreement threaten the delicate balance they’ve built across North America over decades. With more trade negotiations likely on the horizon, this pushback could be the first sign of a growing resistance from an industry not eager to become a pawn in geopolitical strategy.
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