The US and Canada are close to an agreement that would cut tariffs on Canadian-built vehicles from 25% to 15%. Additional 50% tariffs on $20 billion worth of Canadian goods are set to take effect soon. The central disagreement concerns content-based deductions: Canada wants Mexican and Canadian parts to count toward the calculation, while the US wants to limit credits to domestic content only. Several Canadian assembly plants have already been forced to cut output or shut down. If a deal with substantial deductions is reached, the effective tariff rate could fall below 10%.
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