No immediate car tariffs after U.S. trade meeting; at stake $350 billion in autos and parts imported to the U.S.

Although auto-makers have made it clear to the U.S. administration that any auto tariffs will adversely impact supply chains between Canada and the U.S., the threat remains despite a temporary hold on the plan. General Motors and Toyota Motor Corp, especially, would be strongly impacted by any tariffs. President Donald Trump convened with trade advisers over the issue, particularly the premise of “national security implications.” National security is the basis under which the proposed auto tariffs, and current tariffs on steel, would be implemented despite trade agreements.

Tariffs would add between US$2,270 and $6,875 to the cost of each car

 

Although the new U.S.-Mexico-Canada Agreement contains a side-agreement to limit tariffs on cars, it is subject to a cap. The impact of thousands of dollars in tariffs would be significant, initially in terms of auto sales, and later in terms of shifting supply chains.

 

 

The respite may be temporary, as the draft report on a Commerce Department investigation is to be revised and resubmitted. Ultimately, the President has final say, but will likely be guided by recommendations of the Commerce Department and Secretary Wilbur Ross. Ross has until February to present the report with findings from the investigation.

After the report is submitted, the President has 90 days to act, depending on whether the department concluded there was a security threat. His options are tariffs and quotas or no restrictions, in compliance with the USMCA. Currently, Europe is also exempt from auto tariff’s, pending negotiation with the U.S. The EU Trade Commissioner Cecilia Malmstrom is in Washington this week with plans to meet U.S. Trade Representative Robert Lightizer.

At the Commerce Department review meeting was Commerce Secretary Ross, Trade Representative Robert Lighthizer, National Economic Council Director Larry Kudlow, Treasury Secretary Mnuchin and Advisor Jared Kushner.

Did you miss this?

Other Popular Stories

  • Detect lung cancer with a nanotech breathalizer? It works, four out of five times, could revolutionize cancer screening
  • Talk of recovery in Canada's oilpatch as Encana posts better than expected earnings
  • Bombardier flies new CSeries jet for first time
  • More engineers, fewer arts grads needed in Canada: CIBC
  • Government investment, weakening dollar, stronger US economy could spell relief for Canada's manufacturers
  • Canada's oil sands dispute with EU flares
  • Q3 corporate profits falter on oil, financial sector
  • Pump and compressor makers feeling the oil crunch
  • Ontario home builders don't like government's inclusionary zoning plan
  • Ontario's electricity operator announces 16 solar, wind and hydro contracts
  • Honda Canada makes its 7-millionth car, a Civic EX Sedan
  • Engineers among highest paid Canada; Alberta averages highest; quarrying, mining, oil and extraction dominate wages
  • Chrysler expanding Windsor assembly plant for "future vehicle"
  • Financial services fastest growing industry in Canada for exports: Conference Board of Canada
  • Car Tech Trends from CES 2018
  • Vancouver shipyard awarded $3.3 billion to build Coast Guard ships
  • 12 new electric vehicles by 2022 Renaut-Nissan-Mitsubishi alliance commits 30% of overall production output
  • Lobby groups working hard to convince Obama on Keystone
  • Game over for Hydrogen fuel cells? Not really — but an explosion in Norway halts sales of hydrogen fuel cell cars locally
  • Renewable energy advocates optimistic, but political will is lacking
Scroll to Top