According to insiders, under a comprehensive bilateral trade agreement framework, the Trump administration plans to lower tariffs on Canadian made imported cars from the current 25% to 15%; As a condition of exchange, Canada will cancel its trade countermeasures against the United States.

Previously, the White House had imposed a 25% import tariff on passenger cars and pickup trucks manufactured overseas. For vehicles produced in Canada and Mexico, this tariff only applies to the parts of the vehicle that are not domestically produced in the United States. The original intention of the policy is to force car companies to relocate more production processes back to the United States.

The information shows that the composition accounting rules for non US made components mentioned above will also be applied to the new 15% tariff plan. However, this trade agreement has not yet been fully finalized. Based on past situations, Trump has repeatedly modified or even overturned the trade agreement in the final stages of negotiations, and there are still variables in the plan.

According to informed sources, US and Canadian negotiators have also explored the possibility of further expanding tariff exemptions to cover parts, but the relevant issues have not yet reached a conclusion. If this idea is implemented, there is still hope that the actual tariff level of Canadian cars imported to the United States will further decrease.

Even if only the plan to reduce tariffs from 25% to 15% is implemented, it will still be a significant benefit to the Canadian automotive industry, while benefiting a large number of vehicle companies such as Toyota, Honda, General Motors, and Ford that have set up factories in Canada and exported a large number of products to the United States. As of now, the White House has not responded to the relevant media reports.

At the capital market level, during the after hours trading session of the New York Stock Exchange on August 19th, the overall stock prices of General Motors, Ford, and Stellantis Group did not fluctuate significantly and remained basically flat.