It is reported that Canadian Prime Minister Mark Carney said that the Canadian government will allow automakers to import US-made cars and trucks to Canada duty-free as long as these automakers continue to produce vehicles in Canada.
This move provides some breathing space for automakers including General Motors and Stellantis in the trade war. These car manufacturers have assembly plants in Ontario, Canada, but still need to export a large number of vehicles from the United States America to Canada.
Mark Carney announced that a countermeasures tariff of up to 25% would be imposed on American-made cars, in response to US President Trump's previous measures of imposing tariffs on foreign cars. Canada, the United States America and Mexico have maintained a highly integrated automotive supply chain for decades. Most of the cars and trucks produced in Canada are exported to the United States America, while vehicles made in the United States America dominate the sales of Canadian car dealers.
Mark Carney said at a news conference: "If automakers continue to produce, hire employees and maintain investment in Canada, Canada's countermeasures tariffs will not apply." However, the Canadian Ministry of Finance added in a press release that if automakers cut production or investment in Canada, the number of vehicles these automakers are allowed to import duty-free will decrease accordingly.
The move announced by the Canadian government this time comes at a time when there are growing concerns that automakers might withdraw production from Canada due to Trump's tariff policies. It is learned that Stellantis has temporarily closed its Chrysler and Dodge model assembly plants in Windsor, Ontario. Meanwhile, General Motors said that due to weak demand for all-electric vans, one of its Canadian factories will temporarily suspend production for several months. Although Ford Motor Company has an assembly plant in the suburbs of Toronto, Canada, it is not currently in operation.
In addition, according to the Nikkei, Honda Motor is considering moving some of its car production from Canada and Mexico to the United States America, with the goal of achieving 90% local production of the models sold in the US market.
Mark Carney said that the Canadian government has held many dialogues with the executives of several global automakers. We are closely monitoring issues related to automotive tariffs. Meanwhile, Mark Carney also mentioned his commitment to set up a $2 billion fund to strengthen the domestic automotive supply chain in Canada, and emphasized that no matter who wins the 2025 Canadian House of Representatives election, a broader strategy with Trump on resolving the tariff dispute needs to be reached.
Mark Carney said that the import car tariff policy implemented by the Trump administration would eventually push up the car purchase cost for consumers in the United States America and Canada. He criticized, "This policy is in the wrong direction and is doomed to fail." Meanwhile, he disclosed that there are already indications that the Trump administration is reassessing some tariff measures and may make adjustments.
In the 2025 election of the Canadian Federal House of Representatives, Pierre Poilievre, the leader of the Conservative Party who forms a major competition with Mark Carney, also made a commitment, stating that if elected, he would negotiate with the Trump administration on tariff issues and propose to abolish the federal sales tax on new cars made in Canada.
At the same time, the Canadian government stated that Canada will grant a six-month temporary tariff exemption to goods imported from the United States America for manufacturing, processing, food and beverage packaging, as well as key materials related to achieving public health goals and national security strategies.
Canada currently imposes a 25% countermeasures tariff on approximately 60 billion Canadian dollars worth of American imports (excluding automotive products). This tariff measure mainly targets products such as steel and aluminium, while also covering a wide range of fields including tools and equipment, computers and daily consumer goods.
The Canadian government pointed out that the tariff exemption measures announced on April 15th will provide breathing space for domestic enterprises that rely on importing raw materials and equipment from the United States America, while benefiting key public service institutions such as hospitals, long-term care institutions and fire departments.
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