The Wall Street Journal reported April 27, citing people familiar with the matter, that Nissan, Hyundai and Toyota conveyed those concerns to the administration’s economic advisers.
The companies are among the few that still supply small, lower-priced new vehicles to U.S. buyers, as U.S. automakers in recent years have shifted production toward SUVs and pickup trucks, shrinking choices in the budget passenger-car segment.
The dispute centers on USMCA renegotiation and auto tariffs. President Donald Trump signed the USMCA in 2020, granting duty-free treatment to vehicles that primarily use parts from the United States, Mexico and Canada. But in the second-term administration, a 25% tariff was imposed even on vehicles previously eligible for duty-free treatment, applied to the portion that reflects non-U.S. parts content. During this year’s USMCA review, officials also raised the possibility of scrapping the pact or shifting to separate agreements with Canada and Mexico.
Automakers say the tariff burden is hitting the profitability of low-priced cars first. Jennifer Safavian, CEO of Autos Drive America, said, “Without the certainty and scale that a three-country USMCA provides, automakers cannot continue to produce affordable options for American consumers.”
A pullback in budget models would clash with the Trump administration’s push to ease cost-of-living pressures. The average price of a new vehicle in the United States has risen to around $50,000, a level already out of reach for many consumers. Current lower-priced options include the Mexico-built Nissan Sentra at about $22,600 and the Hyundai Venue imported from South Korea at about $20,550. According to auto information firm Edmunds, eight of the 10 cheapest new vehicles sold in the United States are models from foreign automakers; the other two are small SUVs that General Motors produces in South Korea.
Companies say losses on low-priced models are already growing. Nissan Americas Chairman Christian Meunier said in a recent interview, “Tariffs are killing our affordable cars.” Toyota has also been accumulating losses in its North American business since the tariffs took effect last year. Toyota plans to invest up to $10 billion in U.S. plants over the next decade, but it is taking a cautious approach to major expansion under the current trade environment.
The Trump administration says bringing manufacturing back to the United States is the priority. The White House said automakers that want to sell vehicles to U.S. consumers need to accept the need to return production to the United States. Industry officials, however, say that if tariffs persist, cuts to low-priced models could come before any meaningful expansion of U.S. production.
USMCA renegotiation remains uncertain. U.S. trade authorities have indicated that some level of tariffs could remain even under a revised USMCA, while Canada and Mexico are making tariff relief a key negotiating goal. The outcome could determine how many low-priced new vehicles remain available to U.S. consumers.
* This article has been translated by AI.
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