U.S. and Canadian trade negotiators are reportedly working to enact potential cuts to President Donald Trump‘s automotive tariffs ahead of an upcoming deadline on Wednesday, Aug. 19.
Tariffs Down to 15%?
Negotiations have centered on reducing proposed U.S. tariffs on Canadian-built vehicles down to 15%, depending on the volume of U.S.-sourced content utilized in manufacturing, according to a Reuters report on Monday, which cited unnamed sources.
Read Also: Trump Administration Rejects Current North American Trade Pact — Mexico, Canada Back Continued Talks
Currently, the U.S. levies a 25% tariff on all automotive imports into the U.S. under the Section 232 tariffs, which has since pushed automakers to rethink supply chains.
Automotive tariffs remain one of the primary friction points between Washington and Ottawa as the U.S. demands a reduction of tariffs for only American content, while Canada seeks a cut on content sourced from North America as a whole, the report said.
Such a move could result in tariffs being pushed down to single digits, the report said. Currently, U.S. auto and steel tariffs imposed by Canada, as well as dairy quotas and Canadian stores pulling American liquor off the shelves, remain sticking points in the deal, the report said.
Howard Lutnick Backs Auto Tariffs
Trump’s Commerce Secretary Howard Lutnick backed the administration’s tariffs, saying that the regime was bringing manufacturing jobs in the U.S. auto sector back into the country. He also hailed the domestic manufacturing push incorporated by Ford Motor Co. (NYSE:F) and Toyota Motor Corp (NYSE:TM).
Ford CEO Jim Farley touted the automaker’s domestic-centered manufacturing strategy for Lincoln SUVs, which will begin to be produced in the U.S. starting in 2030. However, the CEO reportedly acknowledged that tariffs played a role in the shift in production.
Elon Musk Touts Tesla’s Domestic Content
Meanwhile, Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk said that the EV giant was the most “made in America” automaker, touting the vehicles’ 84% American content. He also said that Tesla sourced its parts from domestic sources as well.
Read Also: Ford CEO Jim Farley Backs USMCA Overhaul, Says Deal Is 'Critical' to Compete With Japan, South Korea
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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