Canada will provide limited relief from counter-tariffs to certain domestic automakers and manufacturers, the Canadian Finance Ministry said.

The measures come in response to the ongoing tariff dispute with the US and are intended to support Canadian production and investment.

The Government of Canada introduced counter-tariffs following the US imposition of duties on Canadian steel, aluminium, automobiles, and auto parts.

However, in reaction to industry concerns over the potential negative impact of these countermeasures, Canada has outlined a framework for tariff exemptions under specific conditions.

Under the new policy, Canada-based auto manufacturers will be eligible to import a designated number of US-assembled vehicles free of counter-tariffs.

This applies only if the vehicles are compliant with the Canada-US-Mexico Agreement (CUSMA) and if the companies continue producing vehicles within Canada and follow through on planned investments.

The remission framework was announced by Canadian Finance Minister François-Philippe Champagne.

The number of tariff-free imports allowed to each company will be adjusted if there is a reduction in Canadian production or investment activity.

The relief measures follow a series of tariff exchanges between the two countries.

On 3 April 2025, the US imposed a 25% tariff on Canadian automobiles, targeting non-US content in CUSMA-compliant goods.

In retaliation, Canada introduced a 25% tariff on 9 April on US-made vehicles that are either non-CUSMA compliant or contain non-Canadian and non-Mexican components.

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