Some Canadian-Made Auto Parts to Be Exempted From U.S. Tariffs

In the latest twist in the trade war waged by U.S. president Donald Trump, auto parts compliant with the Canada-United States-Mexico Agreement (CUSMA) will not face the 25-percent tariffs due to come into effect May 3.

That’s according to new guidance released yesterday by the U.S. Customs and Border Protection.

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While this is great news for American automakers importing parts from Canada and Mexico, Canadian- and Mexican-built vehicles sold in the U.S. will still face the 25-percent levies on their non-U.S. content.

“The guidance issued May 1 by U.S. Customs and Border Patrol changes nothing for the Canadian auto industry,” Unifor President Lana Payne said in a statement. “It’s a policy designed to keep U.S. factories running, because they rely heavily on Canadian-made auto parts, while continuing to throttle Canada’s auto assembly plants.”

The guidance says the exemption does not apply to automobile knock-down kits or parts compilations.

Earlier this week, President Trump signed an executive order to soften the impact of tariffs on automakers that have been hit by multiple levies. As a result, companies paying 25-percent tariffs on car imports won't also pay other duties, such as those on steel and aluminum.