US, Canada Near Trade Deal Easing Auto and Metals Tensions

The US and Canada are close to reaching a trade deal that would ease tensions over auto and metals tariffs. A source familiar with the matter says the proposed agreement would cut top-line tariff rates on Canadian-built cars and trucks from 25% to 15%. This reduction is seen as crucial for Canada's auto manufacturing industry, which claims the higher rate threatens its survival.

The deal also halves top-line tariffs on Canadian steel and aluminum to 25%, but with a quota arrangement. Only imports up to 4 million metric tonnes per year would be subject to this reduced tariff; any excess imports would face the original 50% rate.

Tariffs on $20 billion of Canadian goods were set to take effect on Saturday, but US President Donald Trump has pushed back the deadline, citing progress in talks. Canadian Prime Minister Mark Carney and US Trade Representative Jamieson Greer have expressed confidence in reaching an agreement that protects American workers and strengthens the North American economy.

A Leger opinion poll showed 56% of Canadians want Carney to make no further concessions to the US, while Trump said the proposed deal would mean US manufacturers and farmers would not pay any tariffs to export their goods to Canada. However, it remains unclear whether auto tariffs will be resolved this week or delayed until a broader review of the US-Mexico-Canada trade deal.