Automotive Industry: Weekly Automotive Pit Stop: USMCA review, June incentive spend

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Automotive Industry: Weekly Automotive Pit Stop: USMCA review, June incentive spend

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Automotive Industry

Weekly Automotive Pit Stop: USMCA

review, June incentive spend

Industry Overview

US chooses not to renew USMCA agreement 02 July 2026

The USMCA was not renewed for another 16 years in its current form following the July Equity

1 virtual joint review (see official statement here), but the agreement remains in effect Global

while negotiations continue among the U.S., Mexico, and Canada. We think the Autos/Car Manufacturers

announcement is best understood as the U.S. declining to approve a status-quo Alexander Perry

extension without changes, with USMCA now moving into annual reviews while Research Analyst

remaining in force until 2036 unless extended or withdrawn. We also think the review is BofAS+1 646 855 1365

becoming a venue to negotiate targeted changes rather than simply approve a clean aperry3@bofa.com

extension. On autos, Canada and Mexico are reportedly looking to lower the current 25% Jack Joyce, CFA

Research Analyst

tariff to at least 15% to improve competitiveness versus other countries, while the U.S. BofAS

is also pushing for higher local content, with one report suggesting U.S. content could +1 646 556 2798

jack.joyce@bofa.com

rise as high as 50%. If higher U.S. content requirements are ultimately pushed through,

we think Ford is best positioned relative to peers (see below for links to our Expert Call

on Monday and USMCA deep dive). We believe the outcome yesterday was the base case

for most economists/analysts, but still adds a layer of uncertainty for autos while

Stock symbol keynegotiations remain ongoing. A third round of bilateral negotiations is scheduled with Adient Plc ADNT

Mexico on July 20th. Aptiv PLC APTV

Asbury Auto ABG