Foreign automakers have warned the Trump administration that they could pull their cheapest car models from the US market if the US-Mexico-Canada Agreement (USMCA) is not renewed or is watered down, the Wall Street Journal reported on Monday.
Trump's economic advisers have been told that some foreign automakers might not be able to build and sell cheaper cars for the US market if the USMCA no longer exists or a renewed version does not significantly reduce tariffs on cars and auto parts made in North America, the report said, citing people familiar with the discussions.
Reuters could not immediately verify the report. The White House did not immediately respond to Reuters' request for comment.
The auto industry has urged the Trump administration to extend the USMCA, which faces a review this year. Car companies call the trade deal crucial to American auto production.
Mexico and Canada have been looking to the USMCA negotiations as a way to provide relief from the steep duties Trump imposed last year, which have caused difficulties for automakers and other industries in a highly integrated North American economy.
Trump last year imposed a 25 per cent national security tariff on automotive exports from Mexico and Canada, compared to zero under the USMCA, which Trump launched in 2020 as the "greatest trade deal ever".
The three nations are due to finish work on the trade deal work by July 1, but the schedule has been complicated by US-Canadian tensions over Trump's tariffs.