Automakers Warn U.S. Trade Policy Could End Affordable Car Models

Foreign automakers including Hyundai, Toyota, and Nissan have warned U.S. authorities about the risk of affordable models disappearing from the market. The cause could be a revision or cancellation of the USMCA trade agreement, which governs the supply of vehicles and parts in North America.

According to Reuters, auto companies have already communicated to the Trump administration that without maintaining favorable conditions, they cannot keep prices low. Production of budget cars is closely tied to supplies from Mexico and Canada, and rising tariffs make such models economically unviable.

The situation is complicated by the fact that in 2025, the U.S. imposed 25% tariffs on vehicles from neighboring countries. This has sharply increased production costs and threatens the entire distributed manufacturing model in the region.

The auto industry is pushing for an extension of USMCA, calling the agreement a key factor for industry stability. Without it, supply chains would be disrupted and car prices would rise, especially in the entry-level segment. Negotiations between the U.S., Canada, and Mexico must conclude by July 1, but the process is strained by trade conflicts. Against this backdrop, the scenario of a reduction in affordable models looks increasingly realistic.

If no compromise is reached, the U.S. market could face a shortage of budget cars. This would put additional pressure on buyers and accelerate overall price increases, making even basic models less accessible to mass consumers.