RVIA provided updates on Canadian tariffs and a trade deal with the European Union.
Canada is scrapping some retaliatory tariffs, a concession reportedly to cool trade tensions with the U.S.
Canadian Prime Minister Mark Carney said, “We have the best deal of anyone in the world right now. Today, the government of Canada is harmonizing its tariffs with the U.S.”
Carney said the average U.S. tariff rate on Canadian goods is 5.6%, the lowest among America’s trading partners.
Canada previously targeted a 25% tariff on imports of U.S. goods that comply with the United States-Mexico-Canada Agreement (USMCA). Last week’s statement said Canada will back off those tariffs.
Canadian tariffs on U.S. imports of steel, aluminum and autos remain unchanged.
Canada’s move occurred shortly after the White House expanded its 50% tariff on steel and aluminum imports to include 407 new products. According to Politico, these new 50% tariffs are an unsettling move for Canada’s steel industry.
Last week, the United States and European Union announced a “Framework on an Agreement on Reciprocal, Fair and Balanced Trade.”
After the European Union follows through on lowering tariffs on American goods, U.S. tariffs on cars and car parts will be lowered to 15%. The tariff is half the 30% tariff Trump originally threatened and lower than the 27.5% tariff rate on Europe’s auto industry.
The European Union intends to eliminate all tariffs on industrial goods imported from the U.S. and to widen preferential market access to U.S. seafood and agricultural products.
According to the deal, the U.S. will apply the higher of either the U.S. Most Favored Nation tariff rate or 15% on goods originating from the European Union.
Effective Sept. 1, the United States will apply only the Most Favored Nation tariff to: unavailable natural resources (including cork); all aircraft and aircraft parts; and generic pharmaceuticals, their ingredients and chemical precursors.
In exchange, most European Union exports—notably pharmaceuticals, semiconductors and lumber—will be taxed at 15%.
The U.S. and the European Union will accept and mutually recognize each other’s automobile standards. Cooperation on standards plays a crucial role in enhancing the transatlantic marketplace.
The White House fact sheet on the trade deal is available here.
RVIA members can email Samantha Rocci, director of federal affairs, at [email protected] with questions.
