A new report suggests if Canada can't convince President Donald Trump to drop all auto tariffs, it should negotiate a trade agreement that draws inspiration from the 1965 Canada-U-S Auto Pact.
The C-D Howe report proposes permanent auto import tariffs between Canada, the U-S and Mexico but automakers would get a break if they meet minimum local production requirements.
Under the model, author and former Toyota Canada executive Stephen Beatty says a manufacturer that produces 100 vehicles in Canada, for example, would be entitled to import up to 100 vehicles combined from the two other countries duty-free.
He says Canada can't leave the future of its auto sector to the fate of damaging tariffs by U-S President Donald Trump.
A 25 per cent tariff by the U-S on Canadian-built vehicles came into effect last month and Canada responded with its own 25 per cent tariff on vehicles imported from the U-S that are non-compliant with the Canada-U-S-Mexico Agreement.
The sector did get some relief last week when U-S Customs and Border Protection guidance said automobile parts compliant with CUSMA will not be hit by Trump's tariffs.