OTTAWA — The Office of the U.S. Trade Representative recently held a separate round of consultations on the review of the North American trade pact that zeroed in on autos, where carmaking giants in the U.S. and around the world showed strong support for the deal and the certainty its renewal would bring.

An analysis by The Logic of the 53 submissions revealed differences on the finer points of the United States-Mexico-Canada Agreement (USMCA), though, hinting at potential sticking points when the joint review gets underway.

It’s good for U.S. auto manufacturing

President Donald Trump’s desire to boost domestic manufacturing is a driving force behind the upheaval he has inflicted on global trade, including by convincing automakers to relocate production to the U.S. The potential cost to Canada became clear in October when, amid other industry moves, Stellantis shifted its planned production of the Jeep Compass from Brampton, Ont., to Belvidere, Ill., as part of a pledge to invest US$13 billion in U.S. manufacturing.

In the USMCA consultation on autos, however, vehicle makers are telling the Trump administration the trade deal has helped increase investment in the U.S. auto industry, too.

Japanese giant Honda highlighted how its investment in the U.S. has increased since USMCA came into force—at a higher rate than in Canada or Mexico. Jennifer Thomas, senior vice-president of corporate affairs at Honda, urged the Trump administration to “preserve and perfect” the deal to keep the investments coming. “To protect the long-term viability of the U.S. automotive industry, we encourage the administration to expedite the USMCA review process and take immediate steps to normalize North American trade,” she wrote.

Autos Drive America, the association representing 13 international automakers with a presence in the U.S., including Toyota, Hyundai, Volkswagen and BMW, stressed its members increased their investments in the U.S. by US$32 billion from 2019 (the year before USMCA came into force) to 2024, with direct employment growing by 22 per cent over that period.

The organization said those decisions about investment and sourcing, which must be made at least four years before production can begin, were based on the USMCA deal as negotiated at the time to meet stringent rules-of-origin requirements.

“Having made significant investments to meet the rules, automakers would now benefit from a stable environment that allows them to consolidate and add to those investments in response to consumer needs and market forces,” wrote president and CEO Jennifer Safavian.

Clear Arrow, a policy advisory firm based in Washington, D.C., made the case that each country in the deal plays a distinct role in the sector that helps the U.S. auto industry compete globally. In Mexico, U.S. automakers have a “cost-effective manufacturing platform,” the firm’s submission noted. Canada’s industry complements that with a “cost-efficient production supported by clean energy, advanced materials and a highly skilled workforce,” Clear Arrow said. “This integrated North American production system is not a vulnerability to be unwound,” the submission said, “but a strategic advantage to be strengthened.”

The Big Three wishes

The American Automotive Policy Council, which made a joint submission on behalf of General Motors, Ford and Chrysler parent company Stellantis, said the USMCA gave U.S. automakers a “high level of predictability, certainty, and trust.” The organization encouraged the Trump administration to remove the separate national security tariffs on autos from all countries. Having put those tariffs in place, the council noted, the administration then cut individual deals with countries such as the United Kingdom to reduce duties on vehicle imports. Those agreements are now undermining the autos from Canada and Mexico that have higher U.S. content, the council said.

“The USMCA has also helped preserve integrated North American supply chains and provide duty-free access to Canadian and Mexican consumers, two very important and lucrative consumer markets,” wrote president Matt Blunt.

General Motors said the USMCA has boosted investment in the auto sector across North America and supported jobs in all three countries. “For example, GM uses a considerable amount of U.S. propulsion in [Mexico-built] vehicles to ensure compliance with the strict rules of origin, linking Mexican vehicle production to U.S. jobs and technology,” Omar Vargas, the vice-president and head of global public policy for GM wrote in his submission. 

He also wrote that GM has focused on “de-risking” elements of its supply chain since 2021, including when it comes to critical minerals and semiconductors. “The USMCA, specifically, integrated North American industrial footprints and preferential tariff treatment, are critical to supporting these investments and to ensuring that U.S. automakers can compete globally.”

In its own comment, Ford suggested tweaks to encourage U.S. production, such as credit for using North American steel, aluminum and semiconductors, or exporting USMCA-compliant vehicles overseas. “Looking ahead, the USMCA should be treated not only as a trade-facilitation framework, but as a policy tool that, through rigorous enforcement, strong rules of origin, and incentives tied to real production, can further advance U.S. manufacturing strength, job creation, and competitiveness in the automotive sector,” wrote Christopher Smith, chief government affairs officer.

Tension over trucks and tariffs

A few submissions suggested the USMCA does not protect all vehicles equally. The criteria for whether a product qualifies for preferential treatment through the USMCA is partly based on rules of origin. This means that a certain percentage of the content in any product must originate in North America. It can get complicated for the auto sector, as the threshold varies for different vehicle classes, as well as their parts.

Bennett McEvoy, CEO of Western Extrusions, an aluminum parts manufacturer with plants in Texas and New Jersey, argued that USMCA favours heavy trucks assembled in Mexico from foreign-sourced parts, which then enter the U.S. through the trade deal without higher tariffs. “We are deeply concerned that current USMCA rules prioritize foreign parts assembly in Mexico over domestic manufacturing,” he wrote.

Preston Feight, CEO of PACCAR, a U.S. heavy truck manufacturer with plants in Texas, Ohio, Mississippi, Washington and Kentucky, urged the Trump administration to address this issue by keeping the separate tariffs on medium- and heavy-duty vehicles that Trump imposed last year, citing national security reasons.