Canada will grant limited relief from its counter-tariffs to domestic automakers and key manufacturing sectors, provided they maintain local production and follow through on investment plans, the Finance Ministry said on Tuesday.
The measure follows Canada’s imposition of a broad set of retaliatory tariffs in response to U.S. duties on steel, aluminum, vehicles, and auto parts under President Donald Trump’s administration.
See also: Canada Imposes 25% Tariff on U.S. Vehicle Imports in Response to U.S. Trade Measures
Industry groups have raised concerns that the counter-tariffs could hurt Canadian businesses, with some companies already reporting layoffs and expected revenue declines.
Canada-based auto manufacturers will be permitted to import a certain number of U.S.-assembled, free-trade-compliant vehicles without facing the 25% duty—so long as they uphold their Canadian operations and expansion plans. “Our counter-tariffs won’t apply if they (automakers) continue to produce, continue to employ, continue to invest in Canada,” Prime Minister Mark Carney said during an election event on Tuesday. “If they don’t, they will get 25% tariffs on what they are importing into Canada,” he added.
See also: Canada Freezes Tesla EV Subsidies Amid Escalating Trade Dispute with U.S.
The Finance Ministry also stated that six-month relief will be provided for goods imported from the U.S. that are used in Canadian manufacturing, processing, and food and beverage packaging. The exemption will additionally apply to imports that support public health, healthcare, public safety, and national security needs.