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The country will allow a certain amount of U.S.-assembled cars to be imported duty-free provided companies maintain domestic production and investment levels.
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Canada will allow domestic car manufacturers to import “a certain number” of vehicles assembled in the U.S. duty free, the country’s Department of Finance announced in a press release Tuesday.
However, vehicles must meet compliance requirements for the United States-Mexico-Canada Agreement to qualify, per the announcement. Additionally, companies must continue to manufacture vehicles and invest in production in Canada to receive the reprieve.
“The number of tariff-free vehicles a company is permitted to import will be reduced if there are reductions in Canadian production or investment,” the press release says.
The Department of Finance Canada did not immediately respond to a request to clarify what the “certain number” was or how it would be determined.
Canada is also providing a six-month relief period for tariffs on goods from the U.S. used for essential services, such as food and beverage manufacturing operations and public health and safety.
“The remission is provided on a time-limited basis to provide businesses and entities with additional time to adjust their supply chains and prioritize domestic sources of supply if available,” the release says.
As the Trump administration has elevated tariffs on imports from Canada and other countries, the U.S.’ northern neighbor has implemented its own trade restrictions. The country began levying a 25% tariff on U.S. automobiles not compliant with the USMCA trade deal on April 9, matching the charge the U.S. has placed on all imported vehicles.
Canada has also enacted additional duties in response to the U.S.’ 25% tariffs on steel and aluminum imports.
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