The Trump administration is reviewing plans to lower tariffs on Canadian automobile imports to 15% from 25%, according to people familiar with the matter. The adjustment would modify a policy introduced last year that imposed a 25% tariff on foreign-made vehicles, with the levy targeting non-U.S. vehicle content to incentivize production shifts to American facilities.
Under the proposed framework, the 15% rate would retain the domestic content provision, though negotiators have discussed expanding exemptions to include additional cross-border components. Such changes could further reduce effective tariff rates for manufacturers operating in Canada and Mexico.
In parallel, Canada is expected to lift retaliatory trade measures as part of the agreement. General Motors, Ford Motor, Toyota Motor and Honda Motor are among the automakers with significant operations in Canada that would be affected by the policy shift.
No final decision has been made, and details remain under discussion. The administration has a history of last-minute revisions or abandoning trade agreements, adding uncertainty to the negotiations.
