U.S. automakers urge Washington to uphold USMCA
Eric AtkinsTransportation reporter
Published December 26, 2025
The six-year review of the United States-Mexico-Canada Agreement is not scheduled to take place until July, but automakers in the United States are already voicing their support for the continental free trade pact – and calling for the elimination of the Trump tariffs.
In congressional testimony and submissions to U.S. Trade Representative Jamieson Greer, automakers – domestic and foreign – are suggesting various changes to the agreement but urging Washington to uphold it. They also point to the financial strain, uncertainty and loss of investments caused by the import taxes imposed by U.S. President Donald Trump.
The agreement, based on the North American Free Trade Agreement that preceded it, has allowed makers of cars and auto parts to boost efficiency and reduce costs by moving production back and forth across borders.
“There’s no question that the USMCA is critical to the auto industry,” said Patrick Anderson, the chief executive officer of Michigan-based consultancy Anderson Economic Group. “Given that, it’s not surprising that the auto industry is intensely concerned about preserving it.”
The review is happening against a backdrop of trade uncertainty brought about by Mr. Trump, who has imposed tariffs on goods from trading partners – including Canada.
This has raised fears that Mr. Trump will cancel the agreement.
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“The USMCA has an existential threat now that it hasn’t had in decades,” Mr. Anderson said by phone. “We have a U.S. president that’s openly questioned whether we should have, not just the USMCA, but wide-ranging free-trade agreements between the United States and our major trading partners, and that’s a risk that is new to the relationship we have between the United States and Canada – and it’s new to the auto industry in this century.”
Canadian- and Mexican-made cars imported by U.S. companies face 25-per-cent tariffs on the non-U.S. content. Mr. Trump skirted the free-trade agreement by using Section 232 of the Trade Expansion Act of 1962 to impose tariffs on imported cars, metals and other goods, declaring them a threat to national security.
In contrast, cars imported from the U.K., South Korea, Japan and Europe are tariffed at 15 per cent.
In a submission to Mr. Greer, the Detroit Three’s representative says this makes it cheaper for them to import cars from overseas – products that have little or no U.S. content – than to manufacture in North America using U.S. labour and products.
“These policies disadvantage USMCA-compliant vehicles and weaken our domestic supply chains,” said Matt Blunt, president of the American Automotive Policy Council, which speaks for Ford Motor Co., General Motors and Stellantis NV, in a statement to The Globe and Mail.
The group also objects to the 50-per-cent tariffs on imported steel and aluminum. In their submission, the carmakers said the U.S. is effectively stacking taxes on top of the 25-per-cent tariffs on USMCA-compliant cars that already contain a lot of U.S. content.
The group calls the USMCA the auto industry’s “most vital” trade agreement, saying it has spurred more than US$210-billion in U.S. investment since its implementation.
Autos Drive America, a lobby group that represents Toyota, Volkswagen and other international carmakers that operate U.S. assembly plants, said the Trump tariffs came after several events that disrupted the auto industry: the pandemic, port congestion, semi-conductor shortages and supply-chain delays.
All these happened while the industry was undergoing a massive technology shift toward electric vehicles. Still, “all of those disruptions have been dwarfed by those accompanying the duties imposed pursuant to the Section 232 investigation on automobiles and auto parts.”
The group urged the three countries to find a way to eliminate the tariffs on USMCA-origin cars and parts.
Diego Bitar, who studies the trade deal at the Center for Strategic and International Studies, told a congressional hearing on USMCA in December that the agreement is not perfect, but it has driven up interregional trade by 37 per cent over the past five years.
Without the pact, “supply chains would fracture, manufacturers in autos, aerospace, agriculture and advanced industries would face higher costs and more delays,” he said. “Millions of American jobs will be at risk. And competitors like China would gain ground in sectors where North America currently leads.”
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For the Canadian automotive sector, the prospect of losing the USMCA is even more grave.
David Adams, the head of Global Automakers of Canada, which represents the country’s largest manufacturers, Toyota, Honda and several overseas brands, said in an interview that the USMCA has worked well and could be improved with “surgical” changes.
He is braced for an increase in minimum U.S. content requirements, which would put Canadian and Mexican factories at a disadvantage. “In an ideal world we’d like everything to stay the same, but I don’t think that’s going to happen.”
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