[Fuzz]

Originally Posted by puffnstuff

I saw someone say it affected Tesla. Built in US and exported to Canada and not included in the FT deal.
I have no idea if thats the case though.

Ya, not sure it would because I assume they are CUSMA complaint so we couldn't tariff them without breaching CUSMA ourselves. And that seems to be where Trump has drawn a line he won't cross.

From 2022

The dispute centres on how the three countries define a North American vehicle. A provision in CUSMA states that by 2025, 75 per cent of each vehicle and of certain core components must be manufactured in the country of origin in order to cross a North American border duty-free. If those products fail to meet that threshold, the U.S. can charge tariffs under World Trade Organization rules.

The U.S. interpretation of the provision is more stringent than Canada's and could make it harder for entire vehicles to qualify for duty-free treatment.
Mexico and Canada argue that if 75 per cent of an essential car component is manufactured regionally, that's enough to define it as a duty-free North American part in a fully-assembled vehicle. The U.S. doesn't agree — which could make it harder for entire vehicles containing those parts to meet the 75 per cent threshold for duty-free trade.

https://www.cbc.ca/news/politics/can...afta-1.6313306

I assume 75% is defined somewhere, because is it by number of pieces? Weight? Size? Cost?

Ah, followup.

In a report circulated on January 11, 2023, a dispute resolution panel established under the Canada-United States-Mexico Agreement (“CUSMA”) sided with Mexico and Canada against the United States in respect of automotive rules of origin. The panel found that the US requirements for calculating regional value content (“RVC”) for passenger vehicles and light trucks are in breach of CUSMA’s rules of origin.[1] In siding with Mexico and Canada (and a significant portion of the automotive industry), the panel confirmed that CUSMA allows vehicle manufacturers to “roll-up” the cost of originating core parts. The US is expected to bring itself into compliance with the panel’s ruling, thereby allowing for freer trade in the North American automotive market. Absent such compliance, Mexico and Canada would be legally entitled to retaliate against the US by imposing duties or otherwise taking measures of equivalent effect.

CUSMA contains complex “rules of origin” for determining whether a vehicle originates in a CUSMA Party, thereby entitling it to preferential tariff treatment. Under those rules, 72% of the value of finished passenger vehicles and light trucks must originate in a CUSMA Party.[2] CUSMA also requires 72% of the value of core parts to originate in a CUSMA Party,[3] but permits the use of more flexible methods for calculating the RVC of core parts than it does for calculating the RVC of the finished vehicle. The RVC requirements for both finished vehicles and core parts will increase to 75% on July 1, 2023.

https://mcmillan.ca/insights/let-the...d-under-cusma/


So it sounds like it is cost, and Tesla batteries are made in the US, I believe, and given that's a huge chunk of value, they probably comply.