The inconsistency of penalizing cars made with mostly North American content, along with U.S. manufacturing losses, should give Canada and Mexico leverage to get a better deal

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The inherent absurdity of President Donald Trump’s tariff mania was laid bare in the deal he has just announced with Japan.

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After it comes into force, a Toyota RAV4 made in Japan will be charged a tariff of 15 per cent, while a similar vehicle made in Cambridge, Ont., with two-thirds North American content, will be charged a 25 per cent import levy. Trump has threatened that Canada will face a 35 per cent tariff on all goods not covered by the U.S.-Canada-Mexico trade deal (USMCA), including autos, by Aug. 1 barring any last-minute deal. Needless to say, Toyota is unlikely to continue making cars in Canada for long, if that differential remains in place.

Trump heralded his agreement with Japan as “the largest TRADE DEAL in history” on social media.

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