Foley Automotive Update: July 2, 2026

Short summary

USMCA renegotiation begins July 1 with potential $2,000-per-vehicle cost increase if terms prove unfavorable; U.S.-China trade comments deadline July 10. U.S. new vehicle sales projected to decline 2.5% year-over-year for full-year 2026, with hybrids forecast to reach 27% market share by 2031. Trade escalation threats (Trump's proposed 100% EU tariffs on digital services), DRAM chip shortages, and Chinese automakers aiming for 16% European market share by 2030 are forcing VW to plan 100K job cuts and driving major operational restructuring across Western automotive.

• •USMCA renegotiation (July 1 start) and U.S.-China trade comment deadline (July 10) pose tariff and cost risks to automotive operations
• •U.S. vehicle sales declining 2.5% YOY for 2026; hybrid adoption projected to reach 27% market share by 2031
• •Chinese OEMs targeting 16% European market share by 2030; VW planning 100K job cuts to remain competitive amid trade escalation

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