Foreign-based automakers warned the Trump administration that they are looking at pulling their cheapest car models out of the U.S. market if the U.S.-Mexico-Canada Agreement isn’t renewed or is watered down, according to people familiar with the discussions.

The WSJ’s Sharon Terlep and Gavin Bade write that cars like the Honda Civic and Toyota Corolla are made in the U.S., but rely on parts from all three North American countries. The USMCA, signed by President Trump in 2020, provided tariff-free treatment to cars built largely with U.S., Mexican or Canadian parts.

Trump upended those supply chains with his second-term 25% tariff on the non-U.S. content of vehicles that previously would have qualified as duty-free under the USMCA. The president and his team have considered ditching the USMCA or splitting it into two separate deals.

If USMCA no longer exists or a renewed version doesn’t significantly reduce tariffs on cars and parts made in North America, some foreign carmakers might not be able to supply the cheaper cars for the U.S. market, the people said.

• Nissan Motor said it expects a narrower annual net loss, even as its global sales slide, citing one-off gains on revised U.S. emissions rules and cost cuts. (WSJ)
• The director of the Congressional Budget Office said recent U.S. tariff-policy shifts could add $1.1 trillion to federal budget deficits over 10 years. (Bloomberg)

Some insurers are now requiring ships to essentially follow an Iranian-approved route through the Strait of Hormuz as a condition of getting war-risk coverage, according to insurance broker Marsh. The new requirement reflects the continuing uncertainty and risk over the waterway, which is effectively blocked, the Journal’s Jean Eaglesham writes.

Insurers’ concerns over the risks in the strait continue to be reflected in their pricing. Rates for war-risk cover are now around 3% to 8% of the ship’s value, said Marcus Baker, global head of marine & cargo at Marsh. That is down from a 10% high before the cease-fire, but still many times the typical 0.25% peacetime level.

• Iran presented regional mediators with a new offer to stop its attacks in the strait in exchange for a full end to the war and a lifting of the U.S. blockade of Iranian ports. (WSJ)
• Iran is reviving derelict “junk storage” sites, using improvised containers and trying to ship crude by rail to China as it works to avoid a production shutdown with a U.S. blockade bottling up its exports. (WSJ)
• Piracy off the coast of Somalia is resurging, with four attacks in as many days, prompting the Joint Maritime Information Center to upgrade its threat level to “substantial.” (Splash247)

ASML is building new facilities, repurposing existing clean rooms and working on more advanced machines to churn out more chips as it races to meet big tech companies’ surging demand for AI infrastructure.

The only supplier of the complex machines needed to make cutting-edge chips at scale is also adding engineers and cutting leadership roles to speed up decision-making, the WSJ’s Kim Mackrael writes.

American technology giants plan to spend hundreds of billions of dollars this year to build out AI infrastructure. That has spurred chip makers to accelerate investments. To help ramp up, the Dutch company expects to spend about $2.2 billion this year on property, infrastructure and equipment, up roughly 20% from 2025.

• Meta Platforms agreed to purchase up to a gigawatt of solar power from Overview Energy, a space-based-power startup. (WSJ)

• China’s industrial profit surged 15.8% in March from a year earlier, driven by equipment and high-tech manufacturing sectors. (WSJ)
• German consumer confidence dropped to its lowest level since February 2023. (WSJ)
• United Airlines CEO Scott Kirby said the company had abandoned pursuit of a merger with American Airlines. (WSJ)
• A group of budget airlines including Frontier and Avelo is seeking $2.5 billion in government assistance in exchange for warrants that could convert into equity stakes. (WSJ)
• France’s Forvia agreed to sell its automotive interiors business to Apollo Global Management in a deal valuing the unit at about $2.13 billion, including debt. (WSJ)
• Knight-Swift Transportation Holdings is cutting its brokerage carrier base and tightening safety requirements for third-party carriers. (Journal of Commerce)
• STG Logistics said it cleared the final hurdles to exit bankruptcy. (Commercial Carrier Journal)
• FedEx plans to bring MD-11F aircraft back into service in May, six months after grounding them following a deadly UPS crash. (Cargo Facts)
• South Korea’s Ulsan Port Authority said it completed the world’s first port-to-ship ammonia fueling operation for a commercial vessel. (gCaptain)
• Transportation Secretary Sean Duffy announced a new initiative to curb congestion, asking state and local officials to identify top traffic bottlenecks. (Transport Topics)
• Supply-chain crime events in the U.S. and Canada fell 5.3% year-over-year to 767 in the first quarter, though the value of losses was essentially unchanged, according to Verisk CargoNet. (The Trucker)

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.