US Nears Trade Deal with Canada, Cuts Key Tariffs on Autos

The US and Canada are nearing a trade deal that could see Washington cut key tariffs on Canadian-built cars, trucks, and metals. The proposed agreement would lower top-line tariff rates on autos to 15% from the existing 25%, which industry executives say threatens domestic auto manufacturing.

A source familiar with the matter said the two countries are working towards an agreement that would also halve the top-line tariffs on Canadian steel and aluminum to 25%. However, these lower steel tariffs would only apply to a certain import volume under a quota arrangement, with one industry source suggesting the quota would likely be set at 4 million metric tons per year.

Canadian Prime Minister Mark Carney briefed provincial leaders on Wednesday, saying that progress was being made. US Trade Representative Jamieson Greer also expressed optimism, stating that negotiators had reached an agreement that would protect American workers and strengthen the North American economy.

The deal is expected to be finalized by Saturday, when tariffs on $20 billion worth of Canadian goods are scheduled to take effect. However, industry executives say that even a 15% tariff rate could still have devastating effects on domestic auto manufacturing.