Listen to this articleDear 5 minutesThe audio version of this article is generated using AI-based technology. Pronunciation errors may occur. We are working with our partners to continually review and improve results. Detroit automakers plan to argue to the Trump administration that their proposals for a revised North American trade deal could cost the companies billions of dollars and hurt their competitiveness against foreign rivals. U.S. auto companies are still struggling to absorb the slew of tariffs the administration implemented last year, including taxes on steel and aluminum, auto parts and vehicles shipped from Mexico and Canada, and say their rivals from Japan, South Korea and Europe face lower tariffs. Now, U.S. auto executives are concerned that U.S. proposals presented ahead of scheduled talks with Mexican trade officials next month could drive up costs even further. One of the most contentious points for automakers is Washington’s requirement that vehicles contain at least 50 percent American-made content to qualify for lower tariffs, as Reuters reported in May. That requirement, as well as a proposal to increase overall North American vehicle content from the current level of 75 percent, would add at least $2 billion in annual costs for each Detroit automaker, according to estimates from two automakers. Canadian companies rush to ship goods to US ahead of new 50% tariffs: Canadian companies rush to ship goods to US ahead of new 50% tariffs Canadian companies vulnerable to new 50% US tariffs are rushing shipments and hoping for a breakthrough deal to avoid punitive tariffs before the August 19 deadline. Those expenses would be on top of costs automakers have already been incurring due to various taxes in place since last year. to comment. Administration officials have said their tariff measures have been aimed at spurring more investment in American factories and jobs. General Motors expects gross expenses related to the tariffs to cost it between $2.5 billion and $3.5 billion this year, which could account for more than 20 percent of its operating profit. Ford Motor has set its net tariff achievement at around $1 billion this year. But Ford – which already makes a higher percentage of its vehicles sold in the United States domestically than its Detroit rivals – got the message, he said. “We realized very quickly, ‘Hey, look, we need to make some changes here,’” he said. U.S. Commerce Secretary Howard Lutnick, in a joint interview, said he is hopeful that more automakers will follow the lead of Ford and GM, moving factory work to the United States. “We worked together to get it right,” Lutnick added. U.S. and Mexican officials are planning a fourth round of trade talks next month. Canadian trade officials have been meeting with their American counterparts this week in an effort to avoid another round of tariffs on Canada that take effect next week. Asian automakers’ advantages rankle The American Automotive Policy Council, which represents Ford, GM and Jeep maker Stellantis, referred Reuters to a June 30 statement that said U.S. automakers are at a disadvantage against Japanese, South Korean and European automakers that export to the U.S. and face a flat 15 percent tariff. GM CEO Mary Barra said on an earnings call in July that the company is focused on “making sure that American automakers can compete and win when we look at what the tariff rates are for the Europeans, the Japanese and the Koreans.” SEE | How Trump’s 50% tariffs could affect the Canadian economy, explained:How Trump’s new 50% tariffs could affect the Canadian economy; explainedAmid US President Donald Trump’s threat to impose 50 per cent tariffs on Canadian exports, CBC’s Linda Ward breaks down the impact it will have by product category and province. An American auto executive said Trump forged deals more quickly with Korea and Japan because those governments were able to defend their automakers as part of broader trade deals focused on national security, while American auto companies did not have the same influence. we have a president or a prime minister who can call Trump on our behalf,” the executive said.WATCH | Canada-US trade representatives prepare new speech for Trump:Canada-US trade representatives work on new speech for TrumpCBC News has learned that Canada-US Trade Minister Dominic LeBlanc and US Trade Representative Jamieson Greer are working on a proposal to present to US President Donald Trump before a deadline tariff that could see hundreds of Canadian products hit by a 50 percent tax. Jennifer Safavian, president of Autos Drive America, a trade group for foreign automakers in the U.S., including Toyota and Hyundai, said the U.S.-Mexico-Canada trade talks are critical for all automakers. Safavian in a statement. U.S. automakers currently face a tariff of about 25 percent on imports from Mexico and Canada, but vehicles with higher amounts of American-made content get lower tariffs. GM told Reuters that vehicles that have significant U.S. and North American content “should receive better treatment than vehicles that do not,” adding that the automaker is encouraged by the administration’s progress in the negotiations. encouraged by the talks and is working with all three governments “to ensure we can build and sell affordable vehicles across the region.”
