US could cut key tariffs as part of proposed Canada deal, source says
WASHINGTON: The US and Canada are closing in on a trade deal in which Washington could cut some contentious tariff rates on Canadian-built cars and trucks, and key metals, a source familiar with the matter said on Wednesday.
The United States and Canada are nearing a trade agreement that could reduce certain tariff rates on Canadian-made cars, trucks, steel, and aluminum, according to a source familiar with the negotiations. US President Donald Trump had threatened to impose additional tariffs on Canadian imports on Wednesday, but pushed back the date to Saturday due to progress in talks.
Canadian Prime Minister Mark Carney confirmed that the two countries are moving towards an agreement. Until a formal deal is reached, negotiators must meet a deadline of 12:01am EDT on Saturday, when tariffs on $20 billion worth of Canadian goods are set to take effect.
The proposed deal aims to reduce the top-line tariff rates on Canadian-built cars and trucks from the current 25% to 15%. Auto executives suggest that Canada is pushing for a reduction to 10%. The proposed deal would also halve the top-line tariff rates on Canadian steel and aluminum to 25%, although these lower steel tariffs would only apply to a certain import volume under a quota arrangement. If imports exceed this quota, the original 50% steel tariff would apply.
The deal has generated optimism, with US Trade Representative Jamie L. Greer stating that negotiators have reached an agreement protecting American workers and strengthening the North American economy. US President Trump hailed the deal, emphasizing that US manufacturers and farmers would not pay any tariffs when exporting goods to Canada.
However, it remains unclear whether the auto tariffs will be resolved this week or delayed until a broader review of the US-Mexico-Canada trade deal, which appears set to extend into the following year.
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