Three sources said on Monday the US and Canada are negotiating a possible cut to
US auto tariffs from 25% to 15% after deducting some value content. If no deal
is reached by a Wednesday deadline, the US will impose heavy new tariffs on
US$20 billion of other Canadian goods. US officials propose the 15% tariff would
exclude only US domestic value; Canadian officials want to exclude all North
American content, including parts from Canada and Mexico. Auto industry
officials said a broader regional-content deduction could cut the effective
tariff on North American-made cars to the low single digits, well below the 15%
applied to imports from Japan, Korea and the EU and the 10% tariff on most UK
cars.
