According to a report published by Reuters, the United States and Canada are nearing a trade agreement that could lower U.S. tariffs on Canadian steel, aluminum, and vehicles.
Under the proposed agreement, U.S. tariffs on Canadian steel and aluminum would be reduced from 50 percent to 25 percent. However, industry sources have stated that the reduced steel tariff will only be applied within the quota, which is expected to be set at 4 million tonnes per annum next year, while shipments exceeding this volume will continue to be subject to a 50 percent tariff.
Meanwhile, the overall tariff on Canadian-made cars and trucks could drop from 25 percent to 15 percent, although Canada is reportedly seeking a reduction to 10 percent. After deducting the cost of American-made content, the effective tariff rate can be significantly reduced.
U.S. President Donald Trump has postponed additional tariffs on about $20 billion worth of Canadian goods to be imposed until Saturday, citing progress in negotiations. Canadian Prime Minister Mark Carney also said that the parties were moving towards an agreement, although officials indicated that further work was needed before a deal could be finalized.
The talks also address Canadian restrictions on alcoholic beverages, cheese, and cars in the United States. The Reuters news agency noted that uncertainty remains about whether car tariffs will be imposed immediately or will be considered during a broader review of the Agreement between the United States, Mexico and Canada.
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