Last week, I traveled to Capitol Hill to meet with a number of lawmakers on issues that matter to dealers and our industry. Many issues were discussed, including preventing the sales and manufacturing of Chinese vehicles in our country, opposition to the proposed Right To Repair legislation, and the current regulatory environment. One of the most pressing issues revolved around the renewal of the US-Mexico-Canada trade agreement. In 2017, the Trump Administration began the process of renegotiating NAFTA, and in 2020 its replacement, the U.S.-Mexico-Canada Agreement (USMCA), was born.
Now all three countries must agree to renew the pact for an additional 16-year term. If any of the countries decline to renew, the agreement will be subject to annual review for the next ten years. Although undesirable, complete withdrawal is also an option. Mexican and Canadian authorities have expressed confidence in the agreement’s future. America’s auto dealers should do the same.
Auto dealers are the final link in a complex North American automotive supply chain. The vehicles we sell and service depend on parts, materials, and manufacturing processes that cross borders multiple times before reaching our showrooms. USMCA recognizes that reality while strengthening incentives to keep production in North America. The agreement increased the required North American content for passenger vehicles and light trucks from 62.5 percent under NAFTA to 75 percent, established new requirements for core auto parts, and strengthened sourcing rules for North American steel and aluminum.
For dealers, a stable and predictable North American automotive market is essential. Renewing USMCA would provide manufacturers and suppliers with the certainty they need to make long-term investments in factories, technology, and workers. Those investments ultimately determine the availability, affordability, and variety of vehicles on dealer lots.
Renewal, while economically critical, is also important from a strategic standpoint. As global competition intensifies, particularly from China, the United States benefits from strong supply chains that reduce dependence on distant markets and strengthen economic security. A renewed USMCA would help ensure that the U.S and its North America allies remains competitive in the global automotive marketplace while supporting American jobs and investment.
For America’s auto dealers, the benefits are tangible. Strong regional trade supports vehicle affordability, parts inventories, service operations, and consumer choice. It helps create a more resilient automotive marketplace that benefits businesses and customers alike.
In May, AIADA joined every major national automotive association in urging the White House to renew USMCA. Today, on Capitol Hill and beyond, we continue to lobby for renewal. Dealers across the country know how closely our businesses are tied to a healthy North American economy. We support renewal because we see firsthand how efficient automotive integration with Canada and Mexico benefits American workers, businesses, and consumers.
All the Best,
Mike Darrow
AIADA Chairman