Car manufacturers warn: If the US-Mexico-Canada Agreement is weakened, inexpensive models may exit the U.S.

According to a report by The Wall Street Journal, Auto industry sources say that some automakers have warned the Trump administration that if the USMCA (United States-Mexico-Canada Agreement) is not renewed or is weakened, they are considering pulling their cheapest models from the U.S. market. Nissan, Hyundai, Toyota, and others are among the few automakers that still offer new small, economical car models to U.S. consumers. Models such as the Honda Civic and Toyota Corolla are produced in the United States, but they rely on parts from the three North American countries.

In 2020, Trump signed the USMCA, granting tariff exemptions to vehicles whose parts are primarily manufactured in the United States, Mexico, or Canada. However, the auto tariffs implemented during Trump’s second term have disrupted these supply chains, imposing a 25% tariff on the non-U.S. portions of vehicles that previously qualified for USMCA duty-free treatment. Insiders say that if the USMCA no longer exists, or if the new agreement fails to significantly reduce tariffs on North American cars and car parts, some foreign automakers may be unable to continue producing and selling low-cost models in the United States. The information has been passed on to Trump’s economic advisers.