Auto groups urge Trump to extend trade deal with Mexico, Canada

By David Shepardson

WASHINGTON, May 7 (Reuters) - ‌Major auto trade ​groups on ​Thursday urged the Trump administration to extend a free trade deal with Mexico and Canada, saying it was crucial for U.S. vehicle production as North ‌America faces competition from Asia and Europe.

The seven groups representing automakers, car ⁠dealers, and parts manufacturers, said in a letter to U.S. Trade Representative Jamieson Greer first reported by Reuters ‌that extending the U.S.-Mexico-Canada Agreement "will help ‌ensure that the United States remains a globally competitive production base at a time of rapid technological change and intensifying international competition."

The letter comes ahead of a July 1 ​deadline for a six-year review. Mexico and the United States have agreed to launch formal bilateral negotiations to work out U.S.-Mexico issues in the USMCA during the week ⁠of May 25 in Mexico City.

USTR did not immediately comment.

Mexico and Canada have been looking to the USMCA negotiations as ​a way to get relief from the steep duties Trump imposed in 2025 that have caused difficulties for automakers and other industries in the ​highly integrated North American economy.

The auto groups - which ‌represent General Motors, Volkswagen, Tesla, Toyota, Hyundai and all other major car companies - warned dividing USMCA into distinct trade deals "would introduce unnecessary complexity, increase ⁠administrative burden, create divergent regulatory regimes, and undermine the very supply chains the agreement was designed to strengthen."

Under USMCA and its predecessor NAFTA, there had been more than three decades of tariff-free trade ⁠in autos and auto parts between the three nations until Trump last year imposed a 25% duty on ​global automotive imports on national security grounds under Section 232 of the Trade Expansion Act of 1962.

Since then, Trump has cut deals for 15% tariffs on automotive imports from Japan, the European Union and ‌South Korea and 10% tariffs from Britain, making it cheaper to ship some cars from these countries to the U.S. than from Mexico.

USMCA ‌now requires about 75% of a car's value be sourced from the region, with certain levels ⁠of content from the U.S. or ‌Canada.

A group representing the Detroit ​Three automakers said last year USMCA delivers massive efficiency gains that account "for tens of billions of dollars in annual savings."

(Reporting by David Shepardson; Editing by ‌David Gaffen)

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