Yahoo Finance

Industry data shows that just slightly more than 100,000 vehicles assembled in Britain were sold in the United States last year.

Still, American Automotive Policy Council President Matt Blunt said in the May 8 statement that the U.S. automotive industry is highly integrated with Canada and Mexico; the same is not true for the United States and the United Kingdom.

"We are disappointed that the administration prioritized the U.K. ahead of our North American partners. Under this deal, it will now be cheaper to import a U.K. vehicle with very little U.S. content than a USMCA-compliant vehicle from Mexico or Canada that is half American parts," Blunt said. "This hurts American automakers, suppliers and autoworkers. We hope this preferential access for U.K. vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors."

The American Automotive Policy Council, located in Washington, D.C., represents Ford, GM and Stellantis — which makes Chrysler, Dodge, Jeep, Ram and Fiat brands — on public policy interests.

Spokespeople for GM, Ford and Stellantis told the Free Press on May 9 that the companies support the policy council's statement and had nothing to add to it.

Canada's union calls Trump's deal a 'backward move'

The union that represents Canada's autoworkers appeared equally perturbed at Trump's action. On May 9, Unifor National President Lana Payne told the Free Press that if the Trump administration’s goal is to strengthen the domestic auto industry, prioritizing trade talks with the U.K. instead of ending "a punitive trade war with Canada" is a "backward move" that hurts autoworkers.

Payne said that last year 5 million vehicles were sold in North America that weren’t built in North America.

"We need to address this challenge, which is equivalent to 20 assembly plants worth of lost work. Why this isn’t being discussed by the Trump administration is unclear," Payne said. "Targeting Canadian-made vehicles with higher tariffs than those with no North American ties is not just shortsighted — it’s an attack on our shared industry that sets a dangerous precedent and weakens the collective strength of North American autoworkers."

Payne said there is no such thing as an all-American or all-Canadian vehicle because so many cars built in Canada contain U.S. components and support thousands of U.S. jobs, just as U.S.-made vehicles rely on Canadian parts.

"Undermining this deeply integrated supply chain threatens Detroit Three operations and puts thousands of jobs at risk on both sides of the border," Payne said.

Unifor has called for a united North American approach to trade to protect the shared interest against rising global imports such as those coming from China-based automakers.

Britain's small-volume, high-priced imports

Reaction among the industry experts to the deal with Britain was mixed. Erik Gordon, a business professor at the University of Michigan Ross School of Business said the American Automotive Policy Council's statement is "self serving," claiming a right to "priority relief from what some U.S. workers see as the fruit of the companies’ decisions to move jobs out of the country."

"There will be no noticeable damage to the Canadian-American-Mexican auto industry of partial tariff relief that covers the tiny number of English cars sold in the U.S. — cars that, unlike the cars made by Council members GM, Ford and Stellantis, were not moved from U.S. production and American workers to Canadian or Mexican production," he said.

Fiorani said his data showed the British brands that export vehicles to the United States are: Land Rover, Jaguar, Mini, Bentley, Rolls Royce, McLaren and Aston Martin. About 103,250 vehicles across those seven brands were imported into the United States last year out of the nearly 16 million new vehicles sold here, he said. Fiorani believes Trump tackled the U.K. tariffs first because it was the "low-hanging fruit."

More: UAW says automakers can build millions more vehicles in US; some question that belief

"It’s 100,000 vehicles. It’s 100,000 luxury vehicles," Fiorani said.

Most of those vehicles are higher priced than anything the Detroit Three offers, with maybe a few exceptions such as a top-of-the-line Corvette or heavy-duty pickup. For example, Cox Automotive's spokesman Mark Schirmer said in April the average transaction price for a Land Rover, which sells the most of the British brands in the states, was $113,000.

Fiorani said if Trump's goal with tariffs is to encourage more manufacturing in the United States, these British auto companies were not likely to ever build cars here.

“At 100,000 vehicles a year that’s a small factory that would be spread across seven brands and they would have to build a dozen unrelated vehicles," Fiorani said. "The factory itself would build vehicles that would cost $1 million apiece. That’s an exaggeration, but it would cost a fortune. You’d basically have to hand-build all of these products, even a Mini.”

A 'slap in the face to the US auto industry'

This deal is more aimed at moving an ally, Britain, from unfriendly terms to better terms, Fiorani said.

"Canada should have been there first," Fiorani said. "But Canada is more difficult because they already have a free trade agreement underlying negotiations.”

Gordon agreed that not only was a U.K. deal less complicated than a deal with Canada or Mexico, but also "the Brits reacted less adversarially than the Canadians."

Wall Street analyst Dan Ives said the deal with Britain could hurt the U.S. car industry in the near-term and even long-term, depending on how things shake out. He called it a "George Costanza moment," referring to the oft-ridiculed character on the former popular sitcom "Seinfeld."

"The U.S. auto industry is getting no respect and the U.K. gets a sweetheart deal," Ives, managing director at Wedbush Securities, told the Free Press. "It's illogical. A slap in the face to the U.S. auto industry in our view."

More deals to come

More: Automakers, suppliers compete to hire data specialists to help navigate tariffs

Joe McCabe, CEO AutoForecast Solutions, said there is currently a 2.5% tariff on vehicles imported from Britain to the United States. So the 10% tariff is a small win for the United States, but it won’t move the needle in terms of opening up the U.K. market for more U.S.-assembled vehicles. In short, it does not provide any significant value to more U.S. production.

"This deal was a way to show the U.S. willingness to work with an ally, which should hopefully inspire other allies to come to the table, especially other European countries," McCabe told the Free Press.

He said the American Automakers Policy Council is 100% right in the idea that the highly integrated relationship with Canada and Mexico should be the priority. The White House's recent move to give a bit of relief to U.S. automakers to import up to 15% of their parts and get some tariff reimbursement shows some flexibility.

"However, with the reevaluation of USMCA coming up, the White House will most likely continue to leave the Canada/Mexico relationship in flux in an effort to control any new USMCA contract language to benefit the U.S.," McCabe said.

For now, Fiorani said the math under the current tariffs, with the reimbursements the Trump administration provided on April 29, still makes it cheaper to build the Ford Maverick, Bronco Sport and Mach-E in Mexico and to sell in the United States than for other automakers to import a vehicle from the United Kingdom.

Still, there lies that nagging concern among the U.S. auto industry: Other nations could get more favorable tariff deals ahead of U.S. automakers.

Said Fiorani, "One down. The rest of the world to go.”

Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.

This article originally appeared on Detroit Free Press: U.S. auto industry concerned over Trump's U.K. deal, wants priority