Foreign carmakers warn cheap models face U.S. exit without USMCA deal

Foreign automakers including Nissan, Hyundai and Toyota have warned the Trump administration they may pull affordable models from the U.S. market if USMCA is not renewed or is significantly weakened. Wall Street Journal (gated) reporting. Summary Foreign automakers including Nissan, Hyundai and Toyota have privately warned the Trump administration they may withdraw their most affordable models from the U.S. market if the USMCA is not renewed or is materially weakened Trump's second-term automotive tariffs charge 25% on the non-U.S. content of vehicles that previously qualified as duty-free under the agreement, making entry-level models unprofitable for many manufacturers Eight of the ten cheapest new car models in the U.S. are made by foreign-based automakers, with options such as the Nissan Sentra at $22,600 and the Hyundai Venue at $20,550 among the most accessible for consumers Nissan Americas chairman Christian Meunier said tariffs have been killing affordable cars, while Toyota said it is wary of committing to major U.S. factory investment until a trade settlement is reached The White House said automakers wanting to sell to American drivers need to come to terms with the need to reshore manufacturing, and pointed to deregulation and tax cuts as support for that transition The administration has not committed to tariff-free treatment for automobiles in any revised USMCA, and U.S. Trade Representative Greer has told Mexican officials some level of tariffs are likely to persist Canada and Mexico have both signalled they require automotive tariff relief as a condition of USMCA renewal, with Mexico's economy chief saying the country is focused on reducing rather than eliminating proposed levies Foreign automakers have delivered a stark warning to the Trump administration: without a credible renewal of the U.S.-Mexico-Canada Agreement, some of the most affordable new cars available to American consumers may be withdrawn from the market entirely. Companies including Nissan, Hyundai and Toyota have communicated this position directly to Trump's economic advisers, according to people familiar with the discussions. The message reflects a growing calculation among foreign manufacturers that Trump's second-term tariff regime has made entry-level models financially unviable, and that without a trade framework that reduces duties on North American-built vehicles and parts, the economics of producing and selling cheap cars in the U.S. simply do not add up. At the heart of the problem is a 25% tariff on the non-U.S. content of vehicles that previously would have entered duty-free under the USMCA. Trump signed that agreement in 2020, providing tariff-free treatment to cars built largely with parts from the U.S., Mexico or Canada. His second-term levies have cut across those supply chains, and while some limited relief has been offered, manufacturers say their tariff bills continue to mount. The consequences for consumers would be tangible. Eight of the ten cheapest new car models sold in the U.S. come from foreign-based manufacturers. The Mexico-built Nissan Sentra starts at $22,600 and the Hyundai Venue, imported from South Korea, at $20,550. Detroit's major automakers largely abandoned the small car segment years ago in favour of SUVs and trucks, leaving foreign brands as the primary source of affordable options for buyers priced out of a market where the average new car now costs around $50,000. Nissan Americas chairman Christian Meunier said tariffs have been killing affordable cars and described a USMCA deal as necessary to ease the pain. Toyota said it has been accumulating losses in North America since tariffs took effect and is reluctant to commit to major new U.S. factory investment until a trade settlement provides clearer ground. U.S. sales chief David Christ put it plainly, saying it is difficult to commit two or three billion dollars to new facilities without some form of resolution, and described USMCA renewal as the next b