A consortium including General Motors (NYSE:GM), Ford (NYSE:F), and Stellantis (NYSE:STLA) has voiced criticism over President Donald Trump‘s latest trade agreement with the United Kingdom. The group fears the deal could harm the U.S. auto industry.
What Happened: The American Automotive Policy Council, representing the Detroit Three, expressed its apprehensions, stating, “Under this deal, it will now be cheaper to import a U.K. vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts. This hurts American automakers, suppliers, and auto workers.”
The new trade agreement permits British automakers to export up to 100,000 cars to the U.S. annually at a reduced tariff rate of 10%. This figure is almost equivalent to Britain’s total exports last year and is considerably lower than the 25% tariff imposed on Mexico, Canada, and most other nations, reported Reuters.
The council is concerned that this deal could set a precedent, potentially disadvantaging vehicles assembled in Canada or Mexico in future agreements. The council also expressed hope that “this preferential access for U.K. vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors.”
Why It Matters: The U.S.-U.K. trade deal was sealed on Wednesday, aiming to cut tariffs, strengthen industrial ties, and secure billions in new market access.
However, the auto industry has been grappling with tariff uncertainties. Trump eased auto tariff impacts on parts and North American components under USMCA but kept the 25% tariff on imported vehicles, disappointing automakers hoping for broader relief.
Ford recently hiked prices of select Mexico-produced vehicles, while CEO Jim Farley warned that Trump’s tariffs could cost the company $1.5 billion. The company also withdrew its annual earnings forecast, citing uncertainty caused by the Trump administration’s tariffs.
GM also cut its 2025 forecast due to tariff uncertainties. The auto giant updated its forecast to reflect an expected tariff-related impact of $4 to $5 billion, given the current regulatory and policy landscape.
Ford stock climbed 8.2% over the past month, while General Motors rose 3.52% during the same period. On the other hand, Stellantis fell 2.37% over the past 30 days.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.