The Canadian Finance Minister said Tuesday that in a partial rollback of retaliation against U.S. tariffs, the Canadian Finance Minister would have the automaker import tax-free vehicles, provided the government continues to build cars in Canada and continue to expand previously announced.
Last week, Canada began charging 25% tariffs on vehicles imported from the US in response to President Trump's equal taxes.
Most of the Canadian-made cars and trucks end up in the US. Trump has repeatedly said he wants automakers to move all manufacturers to the US. This is widely seen in Canada as a direct attack on the country's largest non-oil and gas exports.
Automatic trade between the US and Canada has been tightly integrated since the two countries signed trade agreements 60 years ago and eased the flow of cross-border vehicles and related goods. The resulting trade is generally balanced between the two countries, but there was occasionally a slight surplus in the US favor.
Canadian Finance Minister François Philippe Champagne did not specify exactly how many US-made cars and trucks each of the five major automakers are allowed to import without duties.
However, his statement suggests that these figures are linked to Canadian manufacturing. “If production or investment in Canada is reduced, the number of tariff-free vehicles allowed by the company to import will be reduced.”
A spokesman for the Canadian Treasury Department was unable to provide further details immediately. Stellantis, one of the leading automakers, declined to comment on the announcement. Honda spokesman Ken Chiu said its factory in Ariston, Ontario will continue to produce as many vehicles as possible. The other three did not answer the questions.
Only Toyota and Honda, which account for about two-thirds of Canadian car production, currently operate in Canada with near full capacity.
Stellantis recently stopped renovations to a factory in Brampton, a suburb of Toronto, where it would have made gasoline and electric jeeps. The large factory in Windsor, Ontario is in the middle of a two-week closure induced by US tariffs.
The Ford plant in Oakville, Ontario has been closed due to a now abandoned plan to convert it for an electric vehicle. Currently, large-scale pickups are being modified. And General Motors announced that it will largely close production of poor electric vans made in Ingersoll, Ontario until October.
