Detroit’s automakers plan to warn the Trump administration that its proposals for a revised North American trade deal could cost the US industry billions of dollars and erode its competitiveness against foreign rivals, according to a 13 August report by Reuters. The companies are still struggling to absorb the impact of 2025’s tariffs on steel, aluminium and parts shipped from Mexico and Canada, and now worry that the latest proposals, floated ahead of September talks with Mexican officials, could push costs higher still.

The most contentious element is the Trump administration’s demand that vehicles now contain at least 50% US-made content to qualify for lower tariffs, on top of a separate proposal to raise the overall North American content threshold from its current 75% to 92%. Combined, the two changes would add at least US$2bn in annual costs for each Detroit automaker, according to estimates from two of the companies. 

Those costs would land on top of tariff expenses already under way: GM expects US$2.5-3.5bn in gross tariff-related costs this year, potentially wiping out a fifth of its operating profit, while Ford has pegged its net tariff hit at roughly US$1bn. These companies already wrote down tens of billions of dollars in electrification-related walkbacks after President Trump eliminated the US$7,500 federal electric vehicle tax credit in September 2025 and froze new Inflation Reduction Act investments. 

Ford signalled its own response to that pressure on 12 August, announcing it will onshore Lincoln Nautilus production for the US market instead of continuing to use China, citing tariffs directly. In a joint Reuters interview alongside Commerce Secretary Howard Lutnick, Chief Executive Jim Farley told Reuters that Ford “might have been unprepared early on” for Washington’s push toward domestic production but had since “got the message”. Lutnick, for his part, remarked that he hopes other automakers follow Ford’s example.

The timing of the reporting, which cites unnamed executives as its sources, is no coincidence: a fourth round of US-Mexico trade talks is scheduled for next month, and Canadian officials have been meeting their US counterparts this week to avert a fresh round of tariffs due to take effect shortly. This would suggest that recent onshoring decisions may even be functioning as a negotiating signal to Washington as much as a direct response to China-specific tariff costs. 

Detroit’s central complaint is that current tariff structures actually favour the competitors on which they were designed to put pressure. The American Automotive Policy Council, representing Ford, GM and Stellantis, has pointed specifically to a flat 15% tariff facing Japanese, South Korean and European automakers exporting to the US, which, while punitive in theory, is in practice far less than what Detroit absorbs through cross-border North American content rules. GM Chief Executive Mary Barra said in July that her company is focused on “making sure that the US automakers are going to be able to compete and win” against those tariff rates. Despite this sunny outlook, the balance does appear to be tilted against them.

One US auto executive attributed part of that gap to diplomatic leverage rather than manufacturing cost alone, telling Reuters that Japan and South Korea secured faster, more favourable trade deals because they could advocate for their automakers within broader national-security agreements. “We don’t have a president or a prime minister who can call up Trump on our behalf,” they remarked. Jennifer Safavian of Autos Drive America, which represents foreign automakers like Toyota and Hyundai in the US, countered that the ongoing talks matter to every automaker regardless of headquarters, since vehicles built in the US by international brands also rely on significant domestic content.

The dispute sits inside a broader unsettling of North American trade terms: in July, the Trump administration declined to renew USMCA for another 16-year term, opting instead for annual reviews that keep the pact technically in force while opening years of renegotiation. The government’s proposed 50% US-specific content floor, tabled in Mexico City talks in May, would mark the first country-specific threshold USMCA has ever included, effectively sidelining Canada from terms still being negotiated without it. 

Ultimately, a content rule designed to reward domestic manufacturing is instead penalising the automakers most integrated with North American supply chains. Detroit’s decades of cross-border assembly in Mexico and Canada generate the exact tariff exposure that foreign automakers building locally in the US South now, ironically, partially avoid.