By David Shepardson and Kalea Hall
WASHINGTON/DETROIT (Reuters) -A group representing General Motors, Ford and Stellantis blasted President Donald Trump’s trade deal announced with the United Kingdom, saying it would harm the U.S. auto sector.
British carmakers will be given a quota of 100,000 cars a year that can be sent to the United States at a 10% tariff rate, almost the total Britain exported last year, compared to 25% for Mexico and Canada and nearly all other countries.
“Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts,” the American Automotive Policy Council, which represents the Detroit Three automakers, said on Thursday. “This hurts American automakers, suppliers, and auto workers.”
U.S. automakers are concerned this could be a template for other agreements that could put vehicles they assemble in Canada or Mexico at a disadvantage.
White House spokesperson on Friday Kush Desai defended the deal.
“No president has taken a greater personal interest in reviving the American auto industry than President Trump. The Trump administration is working hand-in-glove with automakers to reshore manufacturing that is critical to our national and economic security, including with custom-tailored tariff relief and deregulatory policies,” he said.
The automakers’ group added it hopes “this preferential access for UK vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors.”
Trump last month softened the blow of his auto tariffs by easing the impact of tariffs on parts and materials but left in place 25% tariffs on imported vehicles. He also extended a duty-free exemption for North American parts that comply with the U.S.-Mexico-Canada trade agreement (USMCA) rules of origin.
Automakers have hoped that Trump would ease vehicle tariffs.
Ford this week confirmed it hiked prices of some Mexican-built vehicles because of tariffs and said Trump’s trade war would add about $2.5 billion in costs for 2025, but expects to reduce that exposure by around $1 billion.
Rival GM said tariffs were projected to cost it between $4 billion and $5 billion, but it expected to offset that by at least 30%, while Toyota projected tariff costs for April and May at around $1.2 billion.
(Reporting by David Shepardson and Kalea Hall; Editing by Michael Perry and Andrea Ricci)
