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The U.S. is reportedly planning to cut tariffs on Canadian auto imports into the country to 15%, with Steel and Aluminum tariffs being reduced to 25% as the deadline to reach an agreement looms.
15% Auto Tariffs Could Be Lower in Effect
According to a report by Reuters on Wednesday, officials from the U.S. and Canada were close to reaching an agreement over the tariffs, with the 25% tariff on auto imports being reduced by 10% to 15%, according to anonymous sources cited by the news agency.
However, the 15% tariff figure could actually be lower, as the tariff would come before cuts depending on the volume of U.S.-sourced content in vehicles, bringing the effective rate down to a lower figure, the report said.
Tariffs on Steel and Aluminum could also be reduced to 25% from the earlier 50% tariff, but it would be subject to a certain volume of imports, likely to be at 4 million metric tons, the report said.
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The White House and the Office of the Prime Minister of Canada did not immediately respond to Benzinga‘s request for comment.
The U.S. and Canada would need to reach an agreement before Saturday, 12:01 a.m. EDT, after which tariffs on $20 billion worth of Canadian goods would take effect. Notably, Trump had paused 50% Canadian tariffs for three days as negotiations continued.
Negotiations on Tariffs
Earlier reports suggested that talks were progressing between trade officials from the U.S. and Canada, with the U.S. earlier seeking a reduction in tariffs on American content, while Canadian officials had pushed for a reduction in parts sourced from North America as a whole.
On the other hand, Trump’s Commerce Secretary Howard Lutnick backed the White House’s tariffs, saying that the move was bringing manufacturing jobs in the U.S. auto sector back into the country from overseas. He also hailed domestic endeavors undertaken by Ford Motor Co. (NYSE:F) and Toyota Motor Corp (NYSE:TM).
Elon Musk Touts 84% American Content
Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk said that the automaker was the most “made in America” company, touting Tesla vehicles boasting 84% American content. Musk also reaffirmed that Tesla sourced its parts from domestic sources instead of overseas.
Meanwhile, Ford CEO Jim Farley had backed an overhaul of the U.S.-Mexico-Canada Agreement (USMCA), calling the agreement a crucial element of the automaker’s business strategy.
U.S. steel stocks fell sharply on Wednesday, with Nucor (NYSE:NUE) ending nearly 6% lower, Steel Dynamics (NASDAQ:STLD) closing almost 8% down, Century Aluminum (NASDAQ:CENX) dropping 4.5% and Cleveland-Cliffs (NYSE:CLF) finishing 6% lower.
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