Automakers Urge US to Extend USMCA to Avoid 25% Auto Tariffs
Trade groups including the Alliance for Automotive Innovation and Japan Automobile Manufacturers Association urged US officials to extend USMCA beyond 2026 to maintain parts-content thresholds and investment protections. They warned replacing USMCA with bilateral deals could impose up to 25% tariffs and disrupt North American auto supply chains.
1. Trade Groups Call for USMCA Renewal
On May 8, automotive coalitions including the Alliance for Automotive Innovation and the Japan Automobile Manufacturers Association formally requested that US trade authorities extend the US–Mexico–Canada Agreement beyond its 2026 expiration. They stressed that existing parts-content requirements and investment safeguards are essential for maintaining tariff-free vehicle and component flows across North America.
2. Risks of Bilateral Automotive Deals
The groups cautioned that negotiating separate bilateral agreements could reintroduce up to 25% tariffs on imported vehicles and parts, raising costs for manufacturers. They warned such fragmentation of trade rules could lead to supply-chain bottlenecks and increased compliance burdens for automakers operating in the US, Canada and Mexico.