Seven of the world’s leading automotive trade associations formally petitioned the administration of President Donald Trump to extend the USMCA, describing the free trade agreement as essential to preserving the United States’ position as a “globally competitive production base” amid mounting pressure from Asian and European competitors.
The appeal, delivered in a joint letter to US Trade Representative Jamieson Greer, comes as the three member countries approach the July 1 deadline for the agreement’s mandatory six-year review. In an effort to ease growing tensions within the bloc, the United States and Mexico have also confirmed the launch of formal bilateral negotiations during the week of May 25 in Mexico City to address unresolved trade dispute
Strategic Regional Integration
The coalition represents a broad cross-section of the automotive industry, including automakers, parts suppliers, and dealerships organizations. Its membership includes companies such as General Motors, Volkswagen, Tesla, Toyota, and Hyundai.
In their letter to Greer, the associations argued that preserving the trilateral framework is critical at “a time of rapid technological change and intensifying international competition.” The groups specifically warned against proposals that could divide the agreement into separate bilateral arrangements.
“Dividing USMCA into distinct trade deals would introduce unnecessary complexity, increase administrative burdens, create divergent regulatory regimes, and undermine the very supply chains the agreement was designed to strengthen,” the letter stated.
Tariff Disparities and Economic Impact
The North American automotive landscape has shifted significantly since 2025, when the Trump administration imposed a 25% tariff on global automotive imports under Section 232 of the Trade Expansion Act of 1962. The measures, justified on national security grounds, effectively ended more than three decades of tariff-free trade for some segments that had existed since the implementation of NAFTA.
Current trade conditions have created a scenario in which importing vehicles from overseas can, in some cases, be more cost-effective than sourcing them from regional partners. While Mexican imports continue to face elevated tariffs, the United States has negotiated lower rates for other regions, including 15% for the European Union, Japan, and South Korea, and 10% for the United Kingdom.
Industry representatives argue that these disparities threaten the integrated North American supply chain, which has historically generated major efficiencies for manufacturers. A group representing the “Detroit Three” automakers previously stated that the USMCA framework generates “tens of billions of dollars in annual savings” through integrated production and logistics.
Content Rules and Future Negotiations
Under current USMCA rules, approximately 75% of a vehicle’s content must originate in North America to qualify for preferential treatment. The agreement also includes labor value content requirements tied to production in the United States or Canada.
Officials in Mexico and Canada have indicated that the upcoming May negotiations could serve as a key opportunity to seek relief from the 2025 tariffs. Industry groups argue that the duties have created significant challenges for automakers and other sectors operating within the highly integrated North American economy.
The Office of the US Trade Representative (USTR) has not issued an official statement regarding the industry’s request or the objectives of the May 25 summit in Mexico City.
