Question Period Note: U.S. Section 232 tariffs on autos

The United States imposed global tariffs of 25% under Section 232 of the Trade Expansion Act on imports of automobiles and non-CUSMA compliant auto parts on April 3 and May 3, respectively.

» · Canada is very disappointed with the United States' unwarranted 25% tariff on imports of automobiles.

» · U.S. tariffs go against the letter and spirit of trade rules, including under the WTO and the CUSMA.

» · Canada recognizes the challenge that U.S. tariffs present to the integrated North American automotive industry and has adopted a measured and proportionate response.

» · Canada will continue to engage with the United States to seek removal of its tariffs and will maintain its counter tariffs until the United States withdraws its tariffs.

U.S. 232 Tariffs on Automobiles: On April 3, the United States imposed a global tariff of 25% on imports of vehicles, (automobiles and light trucks), under Section 232 of the Trade Expansion Act.
Given that Canada's exports of automobiles and light trucks to the United States are CUSMA compliant, the 25% tariff applies to the non-U.S. content of Canadian-made vehicles.
In response, on April 9, Canada imposed reciprocal counter tariffs of 25% on non-CUSMA compliant vehicles imported into Canada from the United States, and 25% on non-Canadian and non-Mexican content of CUSMA compliant vehicles imported into Canada from the United States.
The Government of Canada implemented a performance-based remission framework which allows automakers in Canada to import a certain number of U.S.-assembled, CUSMA-compliant vehicles free of the counter tariffs that Canada has imposed, provided that the automakers continue to produce vehicles in Canada and complete planned investments.
Mexico's exports of CUSMA-compliant vehicles to the United States benefit from the same treatment as Canada. Once an agreement is in place, the UK may be able to export 100,000 vehicles to the United States at a 10% tariff rate. U.S. imports from all other countries are subject to the 25% tariff on the full value of vehicles. In 2024, Canada's exports of automobiles and light trucks to the U.S. were valued at C$46.4 billion (93.2% of global exports of vehicles by value) representing 1,134,274 units (85% of global exports of vehicles by quantity).
U.S. 232 Tariffs on Auto Parts: On May 3, the United States imposed a global tariff of 25% on imports of non-CUSMA compliant auto parts under Section 232 of the Trade Expansion Act. For Canada and Mexico, CUSMA compliant auto parts are not subject to the 25% tariff until the Department of Commerce establishes a process to apply the tariff exclusively to the value of non-U.S. content in these parts. U.S. imports from all other countries are subject to the 25% tariff on the full value of the auto parts. In 2024, Canada's exports of auto parts to the U.S. were valued at C$35.2 billion (89.1% of global exports of auto parts).

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