Canada offers trade relief to automakers amid ongoing tariff war with US

Canada’s finance ministry announced on April 15 that it will provide relief to certain domestically-based automakers and manufacturers affected by counter-tariffs, under specific conditions.

This move comes in response to US President Donald Trump’s tariffs on steel, aluminum, cars, and auto parts, which have sparked an ongoing trade dispute between the two countries, Caliber.Az reports citing foreign media.

In a statement, the finance ministry explained that Canada had imposed a series of counter-tariffs on US imports. However, it will waive these tariffs for certain industries, including auto manufacturers, provided they maintain local production levels and follow through on planned investments in Canada.

Prime Minister Mark Carney elaborated on the policy at an election event on April 15: “Our counter-tariffs won’t apply if they (automakers) continue to produce, continue to employ, continue to invest in Canada,” he said.

“If they don’t, they will get 25 per cent tariffs on what they are importing into Canada,” he added.

The Canadian government also announced that it would extend a six-month relief period for goods imported from the US that are used in Canadian manufacturing, processing, and food and beverage packaging. Additionally, companies importing from the US to support public health, healthcare, public safety, and national security objectives will be eligible for the relief.

The trade conflict between the US and Canada has already begun to show signs of economic strain, with several Canadian companies shedding jobs and projecting declines in sales and profits. This latest measure is seen as an effort to cushion the impact of retaliatory tariffs while encouraging continued investment in Canadian industries.

Despite the relief, some industry groups have raised concerns that the countermeasures could negatively impact Canadian businesses, especially in sectors reliant on US imports. The government’s new strategy aims to balance domestic interests while navigating the complex trade dynamics with the US.

By Vafa Guliyeva