US Commerce Secretary Indicates Lower Auto Tariffs on Canada

TMTPOST -- U.S. Commerce Secretary Howard Lutnick suggested the Trump administration may impose auto tariffs on Canada lower than those announced earlier this week, a Canadian official said on Thursday.

Credit：Xinhua News Agency

Ontario Premier Doug Ford on Thursday said Lutnick assured the upcoming auto tariffs may not be applied to the Canadian auto exports to U.S. Lutnick told him in a phone call Wednesday night that vehicle made with more than 50% of U.S.-made parts would not be subjected to the new tariffs, according to Ford.

Ford said if the Canadian-made vehicles are made with less than 50% of parts that are produced in the United States, they would face 12.5% of tariffs, which are just half of whet U.S. President Donald Trump unveiled Wednesday.

Trump on Wednesday signed an executive proclamation to impose a 25% tariff on all automobile imports, effective on eastern daylight time April 3 at 12:01 a.m. The new tariff is “permanent”, Trump underscored in the Oval Office prior to his signing. He told reporters that the tariff will affect “all cars that not made in the United States.”

Trump then added If the cars are “made in the United States, it’s absolutely no tariff.” "We are going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they have been taking over the years," the president states.

Auto tariffs are part of new levies that Trump earlier this week has implied he would soon announce. “We’ll be announcing cars very shortly,” Trump said in a Cabinet meeting on Monday, adding that levies on pharmaceuticals would be announced “at some point”. “So we’ll be announcing some of these things in the very near future, not the long future, the very near future,” Trump said.

Trump added the tariffs on lumber and semiconductor industries at an event about Hyundai’s investment later that day. Trump has described April 2 as "Liberation Day" as he touts the new tariffs on a wide range of imported goods that his administration plans to unveil on that day. When pressed on whether the tariffs on more industries will also enter effect on April 2, namely next Wednesday, Trump said “not all tariffs are included that day.”

When asked about what the Trump admnistration will do next week, Lutnick answered “I don’t know”, according to Ford. The head of Ontario province said he doesn’t believe Lutnick when he was told that 25% auto tariffs would not lead to factory closings in Canada, and he felt the possible reduced tariffs are still “not good at all.”

Ford’s government is trying to figure out how many vehicles partly made in Canada would’t be tariffed under the standard revealed by Lutnick, CBC cited two senior Ontario officials.

The Trump administration has suspended its new tariffs on Canada earlier this month. Trump on March 6 signed executive actions to grant temporary exemptions from tariffs imposed on Canadian and Mexican imports that are covered by the the United States-Mexico-Canada Agreement (USMCA) until April 2, effectively delaying the extra 25% tariffs that just went into effect on March 4 for almost a month. USMC is a trade agreement that Trump's first administration negotiated to replace the decades-old North American Free Trade Agreement.

Canadian Finance Minister Dominic LeBlanc on March 6 announced Canada, in return, decided not to proceed with its second wave of tariffs on 125 billion Canadian dollar of U.S. products until April 2, while it continues to work for the removal of all U.S. extra tariffs.

Canadian Prime Minister Mark Carney on Wednesday vowed to defend the workers, companies and the whole nation. He on Thursday reiterated the pledge and said Canada would move rapidly to trade more with other countries because it was clear that the United States was “no longer a reliable partner.”

Carney said Canada will introduce additional retaliatory tariffs on the United States but they would not be finalized until April 2. “We will respond forcefully — nothing is off the table to protect our workers and our country,” Carney said.