The U.S. Imposes A 50% Import Tariff On Cars Coming From Canada

Canada and the US have been loyal allies since time immemorial, but they are now getting along just a little less well. Naturally, it all revolves around the US Trump administration’s desire to protect the American economy with tariffs, even for the most loyal and closest of the allies. Canada and the US held lengthy and extensive talks about this, but those talks collapsed at the last minute.

According to Automotive News, the collapse of that deal, which involves many more products besides cars, has everything to do with our beloved four-wheelers. For instance, there was reportedly talk of a reduced levy of 15 percent on cars. The Canadians wanted that rate to apply to all vehicles, while the Americans wanted it to apply only to light vehicles and therefore not to larger and heavier pickups, for example.

Following the breakdown of negotiations, the US is hitting Canada with a 50 percent import tariff, a rate that Canada is reportedly set to match soon. That seems unsustainably harsh, especially since successful American models like the Chevrolet Silverado and Toyota RAV4 also roll off the production line (partially) in Canada. However, it should be noted that the import tariff does not apply to American parts in the US, and vice versa in Canada. In practice, the tariff therefore turns out to be lower, but follow-up talks still seem inevitable given these types of tariffs. Incidentally, those talks will not take place for the time being, according to sources.

• Also See: European Trade Commissioner Calls For The US To Stop Its Tariff On Its Cars