The trade relationship between the United States (“US”) and Canada received a brief period of reprieve with the recent 30-day postponement of President Trump’s blanket tariffs and Canada’s retaliatory countermeasures. Despite this intermission, the US and Canada appear set to face off again with tariffs and other countermeasures, much like their counterparts on the ice in the nations face off.
President Trump has shown a willingness to continue his strategy of cajoling Canada into trade concessions, as evidenced by his February 10, 2025, executive order imposing a 25% tariff on all steel and aluminum imports entering the US. While there may be legitimate questions about the legality of such tariffs, in this dispute where the refs are off the ice the size of the US economy is a major advantage.
Businesses in the automotive sector will be interested in the recent conclusion to the automotive trade dispute between Canada, the US, and Mexico (the “USMCA Parties”).
The USMCA Parties had different interpretations of the automotive rules in the Canada-United States-Mexico trade Agreement (the “USMCA”), which required a USMCA Panel to be formed to review the different interpretations and settle the dispute.
This decision is important because it makes it easier for automotive producers to receive preferential tariff treatment under the USMCA, which will help the USMCA Parties save costs when importing and exporting vehicles between the USMCA Parties.
