Comments reveal auto industry splits before USMCA talks

The Future of USMCA and Its Impact on Michigan’s Auto Industry

Michigan's auto industry is at a critical juncture as the United States-Mexico-Canada Agreement (USMCA) undergoes its first major review in 2026. This process will determine the future of one of the state's most vital economic sectors, with far-reaching implications for jobs, supply chains, and trade relations across North America.

Industry Consensus on the Importance of USMCA

A coalition of industry groups, including the American Automotive Policy Council (AAPC), has emphasized the importance of maintaining the current trade framework. The AAPC, which represents the Detroit Three automakers—Ford, General Motors, and Stellantis—has called for continued support of USMCA, stating that it is the "most important and impactful trade agreement" for the U.S. automotive sector.

Glenn Stevens, executive director of the MichAuto mobility arm of the Detroit Regional Chamber, echoed this sentiment, highlighting how USMCA has served as a "trilateral bedrock" for industry resilience. He stressed that the agreement provides the certainty needed for long-term investments in capital-intensive projects that drive Michigan's economy.

Similarly, Autos Drive America, a trade group representing foreign automakers operating in the U.S., acknowledged the need for a stable and predictable trade environment. Jennifer Safavian, CEO of Autos Drive America, noted that the automotive sector must make sourcing and investment decisions years in advance, making stability crucial for growth.

Domestic vs. Foreign Automakers: Diverging Priorities

While there is broad agreement on the need to preserve USMCA, differences have emerged between domestic and foreign automakers. The AAPC criticized recent trade agreements with countries like the European Union, Japan, and South Korea, arguing that they create an uneven playing field for U.S. companies.

The group pointed out that the current 25% tariff on non-U.S. content in vehicles imported from Canada and Mexico complicates supply chains and reduces competitiveness. It also accused some foreign automakers of avoiding compliance with USMCA's rules of origin, instead paying a now-defunct 2.5% tariff rate.

In contrast, Autos Drive America highlighted significant foreign investments in the U.S., noting that member companies have invested $32 billion and added 22% more direct employment since 2019. Safavian argued that stricter rules of origin have created challenges for automakers, suggesting that greater flexibility would encourage more U.S. investment.

Union Concerns and Calls for Reform

The United Auto Workers (UAW) has taken a more radical stance, calling for a complete overhaul of USMCA. The union criticized past trade deals for contributing to job losses and declining wages, and it proposed new measures such as a Labor Value Content wage floor and expanded labor rights across North America.

Shawn Fain, UAW president, stated that the union aims to "stop the global race to the bottom" set by previous trade agreements. The UAW's letter included 750 endorsements from members and families, underscoring widespread support for reform.

Automakers Push for Tariff Relief and Streamlined Rules

Major automakers, including Ford, GM, and Stellantis, have also submitted comments during the USMCA review process. Each company emphasized the importance of preserving regional integration while advocating for changes to tariffs and rules of origin.

Christopher Smith, Ford’s chief government affairs officer, urged the Trump administration to ensure that global automotive tariffs apply only to countries outside North America. GM, in a letter from Omar Vargas, highlighted the benefits of USMCA in creating a combined industrial base that supports U.S. jobs and innovation.

Stellantis called for streamlined and strengthened rules of origin, as well as reduced or eliminated tariffs on USMCA-compliant vehicles. The company expressed willingness to assist the U.S. Trade Representative (USTR) in shaping the future of the agreement.

The Path Forward

The USTR is scheduled to hold a public hearing on the topic later this month in Washington, D.C. The trinational review, as outlined in the original 2020 agreement, is due for completion by July 1 next year.

With over 1,000 organizations and individuals submitting public comments, the debate over USMCA reflects deep divisions within the automotive industry. As the review progresses, the outcome will shape not only the future of the U.S. auto sector but also the broader economic relationship between the U.S., Canada, and Mexico.