The Globe and Mail reports in its Tuesday edition that as U.S.-Canada trade talks approach Wednesday's deadline, the Canadian auto industry finds itself making a grim calculation: What level of tariff can it absorb without being forced to idle more auto plants? The Globe's Eric Atkins and Mark Rendell write that negotiators are seeking a trade agreement in Washington before President Donald Trump imposes 50-per-cent tariffs on a wide range of Canadian goods. Canada wants the U.S. to reduce tariffs imposed last year on autos, metals and lumber, while the U.S. seeks concessions on dairy, alcohol and procurement as well as an end to Canada's retaliatory tariffs on U.S. cars. The U.S. has offered to cut the tariff on Canadian cars to 15 per cent from 25 per cent. Experts say 15-per-cent tariffs on non-U.S. content are unsustainable. However, Canadian negotiators could be faced with accepting them in hopes of winning reductions beginning in 2029, when a new U.S. administration could be in power. At those rates, the effective tariff rate would be about 7 per cent or 8 per cent, based on the value of U.S. parts in Canadian-made cars. This is equal to the labour costs of building a car, making it economically unfeasible.
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