Detroit automakers say the Trump administration’s new trade deal with Britain doesn’t prioritize the American auto industry.
As part of the deal, the Trump administration is lowering tariffs on imports from the U.K. from 25% down to 10%. Automotive experts say the disadvantage for U.S. automakers is that they don’t manufacture or assemble vehicles in the U.K.
“What concerns me is that it doesn’t seem very well thought out,” Jan Griffiths, automotive expert with Gravitas Detroit, said on Friday.
Griffiths is currently in the U.K. She says the new 10% tariffs on the U.K. don’t help U.S. automakers, considering they order more parts and assemble more vehicles in Canada, Mexico and some in China.
“Most of our U.S. vehicle manufacturers are manufacturing vehicles in Mexico and Canada, so it’s quite possible that a vehicle coming out of the U.K. is actually cheaper than one made by our U.S. auto companies manufactured in Mexico or Canada,” she said.
The American Automotive Policy Council, which represents Ford Motor Company, General Motors Company and Stellantis, fired back at the Trump administration with the following statement on Friday:
“The U.S. automotive industry is highly integrated with Canada and Mexico; the same is not true for the U.S. and U.K. We are disappointed that the administration prioritized the U.K. ahead of our North American partners. 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. We hope this preferential access for U.K. vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors.”
Moving forward, Griffiths says she is eager to see how the negotiations with China play out, specifically for the auto industry.
“If this is a sign for things to come for the auto industry, we’ve got trouble ahead,” she said.
Mr. Trump said the details of the agreement are still being finalized and expects it to be finished in the coming weeks. But he said it includes “billions of dollars” of increased access for the U.S. to the U.K. market, including for American agricultural products like beef and ethanol.
