Detroit’s Big 3 automakers, namely General Motors (GM), Ford (F), and Stellantis (STLA) are unhappy about President Donald Trump’s UK trade deal. The American Automotive Policy Council, which represents the three automakers, stated that the deal grants “preferential access for UK vehicles over North American ones.” American automakers are more worried that the trade deal with UK would set a benchmark for future trade agreements with other Asian and European countries.
Big 3 Criticize “Preferential” Terms for UK
The Big 3 are also alleging that the deal could hurt “American automakers, suppliers, and auto workers.” According to the U.S.-UK trade deal signed yesterday, British automakers have a set quota of exporting 100,000 autos per year to the U.S. at a minimal 10% tariff rate. Interestingly, the council states that this figure is almost close to the total number of cars imported from the UK last year. This means, most of the British car exports to the U.S. will attract minimal taxes.
Meanwhile, Trump has not made any adjustments to the tariffs imposed on imports from Canada and Mexico. The Detroit 3 have major exposure to imports from these two countries, which are subject to a 25% tariff rate. The council said that “Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts.”
Detroit 3 Automakers Fear Losing Ground to Rivals
The three automakers had formed partnerships with US-Mexico-Canada Agreement (USMCA) countries following Trump’s negotiation of the 2020 trade deal. Now, they stand to lose out, because Trump seems to have “prioritized” negotiations with UK over their North American partners.
Trump’s administration has softened the blow to the auto industry by allowing companies assembling autos in the U.S. to deduct part of their import costs for two years, giving them time to relocate supply chains. Automaker Ford has warned of $2.5 billion in tariff-related costs in 2025 but said it could reduce them by about $1 billion. Meanwhile, GM said that its tariff-related costs could escalate to between $4 billion and $5 billion. GM is also confident that it can reduce this impact by at least 30%.
Which of Detroit’s 3 Automaker Is the Best?
We used the TipRanks’ Stock Comparison Tool to identify which company among the three is most favored by analysts. Investors can choose to invest in any of these stocks after thorough research.
Wall Street has not given a “Strong Buy” consensus rating to any of these companies, largely due to the looming threat from tariffs. However, GM stock has a “Moderate Buy” consensus rating, with analysts projecting a 11.3% upside potential from current levels.
