Detroit Automakers Warn Proposed USMCA Changes Could Add Billions in Costs

Detroit’s automakers plan to argue to the Trump administration that proposed changes to the North American trade agreement could cost the companies billions of dollars and hurt their competitiveness against foreign rivals, Nora Eckert and Mike Colias reported for Reuters.

Detroit’s major automakers are warning that proposed changes to USMCA rules could significantly increase production costs and pressure their competitiveness. [Photo: Warren LeMay Flickr]

US automakers are still struggling to absorb a range of tariffs imposed by the administration, including levies on steel and aluminum, as well as vehicles and auto parts shipped from Mexico and Canada.

They also say rivals from Japan, South Korea and Europe face lower tariff burdens.

Now, US auto executives are concerned that proposals floated by Washington ahead of trade talks with Mexican officials could raise costs even further.

One of the most contentious proposals would require vehicles to contain at least 50% US-made content to qualify for lower tariffs.

Another proposal would increase the overall North American vehicle-content requirement from the current 75% level.

Estimates from two automakers indicate that the proposed changes could add at least $2 billion in annual costs for each of the three Detroit automakers—General Motors, Ford and Stellantis.

Those costs would come on top of the expenses the companies are already incurring from existing tariffs.