US may cut key tariffs in Canada deal

The United States and Canada are nearing a trade agreement that could reduce certain tariffs on Canadian-made cars, trucks, steel, and aluminum, according to a source familiar with the negotiations. Initially, U.S. President Donald Trump threatened to impose further tariffs on Canadian imports starting on Wednesday, but he later pushed back the date to Saturday. Canadian Prime Minister Justin Trudeau has stated that both nations are moving towards an agreement.

Under the proposed deal, the top-line tariff rates on Canadian-built cars and trucks would be cut from 25% to 15%. However, industry executives suggest that Canada may push for an even lower rate of 10%. The effective rate after deductions for U.S. content production would be significantly lower. Additionally, the top-line tariff rates on Canadian steel and aluminum would be halved to 25%, but only for a specified import volume under a quota arrangement. Any imports exceeding this quota would be subject to the original 50% tariff.

This deal comes in response to the tariffs imposed last year under a national security law, which prompted Canadian retaliatory measures. Canadian Trade Minister Dominic LeBlanc briefed provincial leaders about the talks, emphasizing the need for further discussions. Nova Scotia Premier Tim Houston mentioned that Carney had requested provinces to resume selling U.S. alcohol products, which were previously stopped due to the tariffs.

U.S. Trade Representative Jamie L. Greer confirmed that negotiators reached an agreement aiming to protect American workers and bolster the North American economy. Trump expressed satisfaction with the deal, stating that U.S. manufacturers and farmers would no longer face tariffs when exporting goods to Canada. However, it's unclear whether the auto tariffs will be resolved this week or postponed until a broader review of the U.S.-Mexico-Canada trade deal, which is expected to continue into the following year.

A Leger opinion poll indicated that 56% of Canadians prefer Carney to refrain from making additional concessions to the U.S.