Ford CEO Demands Penalty Structure Targeting GM and Toyota Imports as USMCA Talks Resume

Since the Trump administration declined to extend the USMCA for another 16 years, formally opting for annual reviews instead, the auto industry's internal fault lines have sharpened fast.

Ford CEO Jim Farley told CNBC in a phone interview Wednesday that the renegotiated deal needs to reward automakers that build domestically and penalize those that rely on imports. He named General Motors and Toyota specifically.

"It's imperative that any new agreement makes it easier, not harder, to compete with U.S. makers who import from Japan, South Korea and global competitors that import from those locations," Farley said. "That's the key for us."

The numbers Farley is citing

Farley's position is grounded in a real production gap. GM imported 1.17 million vehicles in 2025, representing 41% of its U.S. sales, according to industry data reported by CNBC. Toyota imported more than 1.19 million units, or 47% of its U.S. domestic sales.

Ford, by contrast, assembled more than 2 million vehicles in the U.S. last year, imported 378,000 units (17% of its 2.2 million total sales), and exported 311,000 vehicles to more than 60 international markets. Farley called Ford "a leader of U.S. auto production" and pointed specifically to its ratio of domestic builds to imports and its UAW workforce as differentiators.

"We're very proud, especially of the ratio between what we build here and what we import," Farley said.

Hyundai, which plans to raise its U.S.-produced share to roughly 80% of domestic sales by 2030 — was the largest importer of vehicles from South Korea in 2025, followed by GM, per industry data cited by CNBC.

Where the talks stand as of July 2

U.S. Trade Representative Jamieson Greer confirmed Wednesday that the U.S. did not agree to renew the USMCA in its current form. The pact remains active until 2036 unless a country withdraws or the parties agree to end it sooner, according to CBT News.

Fox Business reported that the Trump administration intends to pursue separate bilateral deals with Canada and Mexico rather than a single trilateral agreement, with each deal potentially running up to 10 years. A third round of bilateral talks between U.S. and Mexican officials is scheduled for the week of July 20.

The auto sector accounted for about 18% of U.S. trade with Canada and Mexico last year, according to industry data cited by CNBC, making it one of the central pressure points in any renegotiation.

The industry's unified ask — and why it's being ignored

The strongest argument against Farley's preferred outcome comes from the industry's own coalition. A consortium of seven trade groups representing automakers, dealers, and parts suppliers wrote Greer in May urging him to extend the USMCA as written, according to CBT News. On Wednesday, those groups reiterated support for a trilateral structure, warning that splitting the deal into bilateral agreements would add complexity and fracture supply chains built around the current rules.

Hyundai, GM, Toyota, and Ford all made a similar push last fall, per CBT News. The worry is straightforward: auto supply chains cross the U.S., Canadian, and Mexican borders multiple times before a finished vehicle rolls off the line. A bilateral U.S.-Mexico deal that doesn't perfectly mirror a separate U.S.-Canada deal creates compliance headaches and potential tariff exposure at every junction.

That concern is legitimate and isn't just coming from importers trying to protect market access. Domestic manufacturers, including Ford, rely on cross-border parts flow. Uncertainty in that system raises costs across the board regardless of where a vehicle is finally assembled.

Farley's position, though, is that the current trilateral structure already lets importers free-ride on U.S. market access without matching the domestic investment. His argument is that a rewritten deal should price that asymmetry into the agreement, rewarding producers who actually build here.

The unresolved question

What Greer has not yet specified publicly is whether the import-penalty framework Farley wants — essentially differential treatment tied to a manufacturer's domestic production ratio — is on the table in the bilateral talks with Mexico. The July 20 negotiating session will be the first real test of whether the administration's "annual review" structure gives domestic producers the leverage Farley is counting on, or whether it simply extends the current status quo one year at a time.