Detroit Automakers Criticize Trump's US-UK Trade Deal for Favoring British Car Imports

General Motors, Ford, and Stellantis, represented by the American Automotive Policy Council (AAPC), criticized a new U.S.-UK trade agreement under President Donald Trump. The deal reduces tariffs on the first 100,000 UK-made vehicles imported annually from 25% to 10%, disadvantaging U.S. automakers who comply with USMCA rules. The AAPC argues this could set a precedent for future trade deals, potentially harming North American manufacturing. Despite tariff relief on parts, the 25% tariff on finished vehicles remains, impacting costs for U.S. automakers like Ford and General Motors.

Preferential Tariffs for UK Vehicles Spark Industry Backlash

Under the terms of the new trade framework, the United States will reduce tariffs on the first 100,000 British-made vehicles imported annually from 25% to 10%. This quota nearly matches the total number of UK vehicles exported to the U.S. in 2024, effectively granting most British car exports a lower tariff rate. Vehicles exceeding the 100,000-unit threshold will still face the 25% tariff.

The AAPC expressed strong opposition to the deal, stating that it disadvantages U.S. automakers who have structured their supply chains around the U.S.-Mexico-Canada Agreement (USMCA). “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,” said AAPC President Matt Blunt. “This hurts American automakers, suppliers, and auto workers.”

Tariff Disparities Undermine USMCA-Aligned Production

The Detroit Three have invested heavily in North American manufacturing and sourcing strategies to comply with USMCA rules of origin, which require a significant percentage of vehicle content to be produced within the U.S., Mexico, or Canada to qualify for tariff exemptions. Despite these efforts, vehicles assembled in Mexico and Canada are still subject to a 25% import tariff under current U.S. policy.

The AAPC criticized the administration for prioritizing the UK over North American partners. “We are disappointed that the administration prioritized the UK ahead of our North American partners,” Blunt said. “This preferential access for UK vehicles over North American ones sets a troubling precedent for future negotiations with Asian and European competitors.”

Automakers Warn of Broader Trade Implications

The Detroit Three fear that the UK deal could serve as a template for future trade agreements, potentially extending similar tariff reductions to other foreign automakers. “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,” the AAPC said in a statement.

The group urged the administration to avoid creating a two-tiered trade environment that penalizes companies operating within the USMCA framework. “We hope this preferential access for UK vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors,” Blunt added.

Tariff Relief on Parts, But Not on Finished Vehicles

While the Trump administration has taken steps to ease the burden of tariffs on imported auto parts and raw materials, the 25% tariff on finished vehicles remains in place for most countries, including USMCA partners. The administration recently allowed automakers to deduct a portion of the cost of imported parts for two years and eliminated the additional 25% levy on imported steel and aluminum used in vehicle production.

However, these measures have not offset the financial strain on automakers. Ford reported that tariffs would add approximately $2.5 billion in costs for 2025, though it expects to reduce that exposure by about $1 billion. General Motors projected tariff-related costs between $4 billion and $5 billion, with plans to offset at least 30% of that impact. Toyota, which also manufactures vehicles in North America, estimated $1.2 billion in tariff costs for April and May alone.

UK Gains Market Access as U.S. Remains Key Export Destination

The UK has long sought to reduce or eliminate U.S. tariffs on its automotive exports. The United States is the largest destination for British cars, accounting for more than a quarter of the UK’s auto exports in 2024, according to the UK Office for National Statistics. British officials, including Business Secretary Jonathan Reynolds, emphasized the importance of the deal in preserving jobs in the UK auto sector.

“This was very serious,” Reynolds told the BBC. “It would have meant people would have lost their jobs without this breakthrough.”

The agreement also includes provisions to streamline customs processing for U.S. goods entering the UK and to increase British imports of American beef and ethanol. However, no formal trade agreement has been signed, and many of the deal’s details remain under negotiation.

Industry Calls for Rebalancing of Trade Terms

Despite the administration’s assurances that the UK deal is not a model for future trade agreements, the Detroit Three remain skeptical. The AAPC has called for a rebalancing of trade terms to ensure that U.S.-based manufacturers are not penalized for complying with USMCA requirements.

The group emphasized that vehicles assembled in North America often contain a higher percentage of U.S.-made parts than those imported from Europe or Asia. “This deal undermines the value of American content and the investments we’ve made in North American manufacturing,” the AAPC said.

As the Trump administration prepares to enter trade negotiations with Japan, South Korea, and the European Union, the auto industry is watching closely to see whether similar tariff concessions will be extended to other foreign automakers.

Detroit Automakers Criticize Trump's US-UK Trade Deal for Favoring British Car Imports

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