Foreign-based automakers have warned the Trump administration that they are looking at pulling their cheapest car models out of the US market if the US-Mexico-Canada Agreement (USMCA) isn’t renewed or is watered down, according to people familiar with the discussions, The Wall Street Journal (WSJ) reports.
Companies such as Nissan, Hyundai, and Toyota are among the few carmakers to offer US consumers new models of small, affordable automobiles after Detroit-based automakers ditched such cars in recent years in favor of SUVs and trucks.
Although foreign carmakers assemble some of their budget models in the US, they are heavily dependent on spare parts supplied by Mexico and Canada. If previously these components were not taxed under the USMCA, then after the tariff changes of the Trump administration, the tariff on them has reached 25%. Such a sharp increase in costs is forcing foreign automakers to consider stopping the sale of their cheapest cars in the US market.
Eight of the ten most affordable cars in the US are produced by foreign companies, the WSJ notes. Moreover, the other two models on this list are produced by the American auto giant General Motors in South Korea.
















