US Plans to Cut Canada Auto Tariffs to 15%, Steel and Aluminum to 25%

The US plans to lower import tariffs on Canadian cars to 15% and on steel and aluminum to 25%, as a deadline for reaching a deal approaches.

15% Auto Tariff Could Be Even Lower in Practice

According to a Reuters report on Wednesday, US and Canadian officials are close to an agreement on tariffs, with the 25% auto import tariff set to be reduced by 10 percentage points to 15%, according to an anonymous source cited by the news agency.

However, the 15% tariff figure could actually be even lower in practice, as the tariff would apply before accounting for the proportion of US content in vehicles, effectively reducing the rate further, the report said.

Steel and aluminum tariffs could also be cut from the previous 50% to 25%, but this would depend on a certain volume of imports, potentially 4 million metric tons, the report added.

The White House and the Canadian Prime Minister's Office did not immediately respond to requests for comment.

The US and Canada need to reach a deal before Saturday at 12:01 AM Eastern Time, after which tariffs on $20 billion worth of Canadian goods would take effect. Notably, Trump suspended 50% tariffs on Canada for three days while negotiations continued.

Tariff Negotiations

Earlier reports indicated that trade officials from the US and Canada were making progress in talks, with the US initially seeking to lower tariffs on US content, while Canadian officials pushed for reductions on parts originating from the broader North American region.

On the other hand, Trump's Commerce Secretary Howard Lutnick supported the White House's tariff policy, stating that the measures were bringing manufacturing jobs back to the US from overseas. He also praised the domestic efforts of Ford Motor Co. and Toyota Motor Corp.

Elon Musk Promotes 84% US Content

Tesla Inc. CEO Elon Musk said the automaker is the most "American-made" company, touting that Tesla vehicles contain 84% US content. Musk also reiterated that Tesla sources parts from domestic suppliers rather than overseas.

Meanwhile, Ford CEO Jim Farley supported reforming the US-Mexico-Canada agreement, calling it a key element of the automaker's business strategy.