In today's issue:
The White House opened USMCA talks with Mexico, pushed to require cars be 82% North American to trade tariff-free, and left Canada out of the room entirely.
GM unveiled two mid-size Hummer X concepts from its new Pasadena studio, and explicitly said neither is a production commitment.
Jeep is recalling 419,000 Grand Cherokees because a software glitch can delay side-airbag deployment in a crash.
TARIFF MATH
White House Wants Cars to Be 82% North American. Canada Wasn't Invited.
Deputy USTR Jeff Goettman opened the first formal round of US-Mexico USMCA talks in Mexico City on May 28, per the USTR's office. Canada was not at the table.
The US delegation is demanding regional content (the share of a vehicle's parts-and-materials value sourced in North America to qualify for tariff-free trade) rise to 82% from the current 75% floor, with 50% of that value produced specifically in the United States, per Automotive News, Carscoops, and GM Authority.
That US-specific 50% floor is a new construction: the original USMCA set no country-level minimum within the regional threshold, per Automotive World.
A separate "melted and poured" steel-origin requirement, which USTR Jamieson Greer has pushed in congressional testimony, would force suppliers to document origin at the raw-material level, a standard current supply chains cannot meet without significant retooling.
Batteries already face a 75% regional value threshold under existing USMCA rules, per Automotive News Daily Drive. Stacking a 50% US-floor on top of that would directly threaten any EV assembled with cells from Mexico or Canada.
The US is effectively writing a bilateral auto-content deal before the trilateral USMCA review has formally convened. Industry officials expect USTR Greer to negotiate the new rules of origin with Mexico, then present them to Canada as a take-it-or-leave-it proposition, per Reuters. Automakers that spent the last two years shifting production to comply with the current 75% floor now face a second round of restructuring before the first is finished.
Also worth knowing
BYD will pay when its ADAS crashes your car, for one year: BYD announced it will absorb accident costs and legal fees when crashes occur while owners use its "God's Eye" Urban Navigate on Autopilot or Intelligent Parking functions, with coverage lasting one year and requiring the system to be in proper use, per Carscoops and Automotive World. The move, which BYD calls a world first, raises the liability stakes for every automaker still hedging on ADAS accountability. #news
Synthetic motor oil shortage could last until mid-2027: The US is heading into a prolonged synthetic motor oil shortage beginning as early as June, driven by disruptions to Persian Gulf base-stock supply, which accounts for roughly 45% of US supply, per Automotive News. The Independent Lubricant Manufacturers Association told dealers the crunch is expected to last at least through mid-2027, with rationing guidance already being distributed. #market
Mercedes could be barred from the US over Chinese equity ties: The Motor Vehicle Modernization Act of 2026, introduced in the US House, would ban sales of vehicles from automakers with Chinese ownership stakes, per Automotive News. Mercedes-Benz's equity relationships with Chinese automakers could trigger that provision, threatening one of the brand's most critical markets, per Autoblog. The Commerce Department's existing rule already bans certain Chinese hardware and software in connected vehicles, with the software ban taking effect in model year 2027, per Automotive News Daily Drive. #news
What's new
GMC Hummer X: Wrangler-sized, all-electric, no production date: GM unveiled two mid-size Hummer X concepts, a pickup and an SUV, at the opening of its Advanced Design Pasadena Studio on May 29, per Automotive News and Car and Driver. The SUV is roughly the footprint of a Ford Bronco, per americancarsandracing.com, sized closer to a Jeep Wrangler than the full-size production Hummer EV, with a flat-topped, modular exterior silhouette that is cleaner than the current truck, per Automotive News. The pickup targets the same mid-size off-road space. GM offered no powertrain specs or timeline and explicitly said neither concept is a production commitment, per Autoblog.
Recalls & legal action
Jeep Grand Cherokee: 419,000 recalled for delayed side-airbag deployment: Stellantis is recalling 419,035 2022-2026 Grand Cherokee and Grand Cherokee L vehicles because a software calibration error in the occupant restraint controller can prevent side airbags from deploying immediately during a crash, per Car and Driver, Autoblog, and autoevolution. A software update is the fix; owners should expect dealer contact.
Honda and Acura: 98,982 vehicles recalled over unintentional airbag deployment: American Honda is recalling 2016-2026 Civic, Odyssey, MDX, and related models because front passenger seat weight sensors may crack, potentially causing airbags to deploy unintentionally during a collision, per autoevolution and Autoblog. The span of affected model years, ten years across both brands, reflects how long the flawed sensor design was in production.
Quick links
Nissan kills UK's $65M EV powertrain plan: Nissan scrapped a planned $65 million EV powertrain production investment in the UK as part of its global turnaround strategy, which now includes reduced EV spending, per WardsAuto.
Used-car retail prices near July 2023 record: New-car retail prices are now just $30 below the all-time record set in July 2023, while used hybrids and EVs led a $1,450 gain in a single month, per J.D. Power and Catalyst IQ data cited by Auto Remarketing.
European automakers invite Chinese firms into their plants: VW, Stellantis, and other European OEMs are actively offering underutilized factory capacity to Chinese competitors, citing a need to access battery and software expertise that now exceeds their own, per Automotive News Europe.
Honda Ridgeline production halted for 18 months: Honda is stopping Ridgeline production for 18 months because the truck cannot meet current emissions regulations, per Autoline Daily.
Sources: USTR · Reuters via Detroit News · Automotive News · Carscoops · GM Authority · Automotive World · Automotive News Daily Drive · Autoblog (Hummer) · Car and Driver · Automotive News (Hummer) · americancarsandracing.com · Carscoops (BYD) · Automotive World (BYD) · Automotive News (oil) · Automotive News (Mercedes) · Autoblog (Mercedes) · Car and Driver (Jeep recall) · Autoblog (Jeep recall) · autoevolution (Jeep) · autoevolution (Honda) · Autoblog (Honda) · WardsAuto · Auto Remarketing · Automotive News Europe · Autoline Daily