According to a report released by Reuters, the US and Canada are approaching a trade agreement that could reduce US tariffs on Canadian steel, aluminum and vehicles.
Under the proposed agreement, the US tariff on Canadian steel and aluminum would be lowered from 50 percent to 25 percent. However, industry sources stated that the reduced steel tariff would apply only within a quota that is expected to be set at 4 million mt per year, while shipments exceeding this volume would remain subject to the 50 percent tariff.
Meanwhile, the headline tariff on Canadian-built cars and trucks could decline from 25 percent to 15 percent, although Canada has reportedly been seeking a reduction to 10 percent. After deductions for the value of US-produced content, the effective tariff rate could be considerably lower.
US president Donald Trump postponed additional tariffs on approximately $20 billion worth of Canadian goods until Saturday, citing progress in the negotiations. Canadian prime minister Mark Carney also stated that the parties were moving toward an agreement, though officials indicated that further work was required before the deal could be finalized.
The negotiations also cover Canadian restrictions affecting US alcoholic beverages, cheese and motor vehicles. Reuters noted that uncertainty remains over whether automotive tariffs will be settled immediately or addressed during a broader review of the United States-Mexico-Canada Agreement.
