Business · Trade · 53 mins ago
Canadian automakers split over approach to U.S. tariff talks
Canada’s five automakers are divided over how Ottawa should negotiate with the United States on tariffs.
The Detroit Three want a deal soon, while Honda and Toyota warn against accepting a tariff rate that would leave them at a disadvantage.
They support a system of import credits that would reward companies for building more cars in Canada than they sell there.
The dispute matters because the United States is the destination for nearly 90 per cent of Canadian vehicle production.
A U.S. tariff of 25 per cent applies to Canadian-made autos, though U.S. parts are exempt, and Canadian vehicle exports to the U.S. have fallen.
Ottawa walked away from a U.S. proposal to lower the headline rate to 15 per cent, and the current tariff situation is putting pressure on the industry.
Canada and the U.S. have continued informal talks, with negotiators still discussing technical details such as how to count U.S. content in vehicles.
Canada’s automakers are divided over how Ottawa should negotiate with Washington to ease tariffs on the industry.
The Detroit Three want a tariff deal soon, while Honda and Toyota oppose locking in a tariff level they consider uncompetitive.
Honda and Toyota support a tradeable import credit system that would reward companies that build more vehicles in Canada than they sell.
The U.S. has imposed a 25-per-cent tariff on Canadian-made autos, with an exemption for U.S. parts.
The talks affect an industry that exports nearly 90 per cent of its production to the United States.
- Who
- The Detroit Three, Honda and Toyota have different positions; Ottawa is pursuing talks with Washington.
- What
- Canada’s auto sector is split over the approach to negotiating tariff relief.
- When
- Talks broke down over the summer and regained momentum in recent weeks.
- Where
- Canada and the United States.
- Why
- The automakers face different commercial realities, including differences in the vehicles they make, their U.S. content and how they supply Canada.
Detroit Three
Honda and Toyota
Timing of a tariff deal
Detroit Three
Want a deal sooner rather than later to reduce pressure on the industry.
Honda and Toyota
Want Ottawa to avoid locking in an uncompetitive tariff level.
Import credit system
Detroit Three
No position stated in the source.
Honda and Toyota
Support tradeable import credits that reward companies building more vehicles in Canada than they sell.
Talks between Ottawa and Washington broke down.
Washington offered to lower the headline auto tariff rate to 15 per cent as part of a broader trade deal.
Informal talks on autos and other tariffed industries regained momentum.
Ford reopened its Oakville assembly plant, Honda announced it was restarting engine production in Canada, and Stellantis sold its idled Brampton plant to Roshel.
- U.S. tariff
- 25 per cent on Canadian-made autos, with an exemption for U.S. parts
- Proposed tariff rate
- 15 per cent in Washington’s August offer
- Canadian auto exports
- Nearly 90 per cent of production goes to the United States
- Automakers seeking a prompt deal
- The Detroit Three
- Automakers supporting import credits
- Honda and Toyota
- Brampton plant buyer
- Roshel Inc.