The Trump administration is poised to reduce tariffs on automobiles imported from Canada to 15% from 25% as part of a broader deal that would see the US neighbor drop retaliatory trade measures, according to people familiar with the matter.
The White House last year put a 25% tariff on foreign-made cars and trucks. For vehicles made in Canada and Mexico, the tax applies only to a vehicle’s non-US content, a measure intended to push companies to move more production to the US.
The same content provision will apply to the new 15% rate, the people said. Details of the agreement have not been finalized and US President Donald Trump in the past has made last-minute changes to trade agreements or killed them entirely.
US and Canadian negotiators have discussed whether to widen the exemption to include additional content, though no firm decision to do so has been reached, one of the people said. Such an agreement would have effectively reduced the auto tariffs even further.
Still, the concession represents a significant win for Canada’s auto industry and carmakers including Toyota Motor Corp., Honda Motor Co., General Motors Co., and Ford Motor Co. Each company exports vehicles from Canada to the US.
The White House didn’t immediately respond to a request for comment.
Shares of GM, Ford and Stellantis NV were little changed in after-hours trading in New York on Wednesday.
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