Detroit Automakers Warn USMCA Rewrite Could Add $2 Billion Annual Cost Per Company

Detroit automakers plan to tell the Trump administration that proposed revisions to the North American trade agreement could add at least $2 billion in annual costs for each automaker and weaken their competitiveness against foreign rivals. U.S. automakers are still grappling with multiple tariff measures imposed last year, including tariffs on steel, aluminum, auto parts, and vehicles imported from Mexico and Canada. Automakers note that competitors from Japan, South Korea, and Europe face significantly lighter tariff burdens. U.S. auto executives worry that proposals the U.S. government is advancing ahead of next month’s talks with Mexican trade officials could further drive up costs. One contentious provision would require vehicles to contain at least 50% U.S.-made parts to qualify for lower tariffs; another proposal aims to raise the overall regional content requirement for vehicles in North America from the current 75%. Together, these two measures would add at least $2 billion in annual costs per Detroit automaker—on top of the expenses they have already incurred since last year due to existing tariff policies. The Office of the U.S. Trade Representative did not respond to a request for comment. Government officials say the tariff measures are intended to encourage investment in U.S. manufacturing plants and create jobs.