CUSMA Nears August 19 Auto Tariff Deal as 25% US Levies May Drop to 10%
Updated
Updated · Driving · Aug 14
CUSMA Nears August 19 Auto Tariff Deal as 25% US Levies May Drop to 10%
3 articles · Updated · Driving · Aug 14
Summary
August 19 is shaping up as the target for an interim CUSMA auto deal, but industry expectations are for reduced tariffs rather than full removal of U.S. Section 232 duties.
25% tariffs on cars and parts are widely expected to fall to 10%, with effective rates on Canadian-built vehicles potentially landing around 2% to 5% after CUSMA-compliant content is deducted.
Those effective rates hinge on rules of origin that may not be settled by August 19, as Washington pushes to raise regional value content above the current 75%—possibly to 82%—and require 40% U.S.-specific content.
Transshipment has become a central pressure point after the White House issued a 23-page report accusing Canada and Mexico of helping Chinese parts evade U.S. duties, raising the odds of tougher anti-circumvention rules.
Automakers say certainty matters as much as tariff cuts: rates near 2% may be manageable, while effective costs closer to 5% could threaten the long-term viability of Canadian assembly plants.