Topline
Some U.S. autos will be exempt from Canadian tariffs as long as they continue manufacturing in Canada, the Canadian government said Tuesday, following reports of related layoffs impacting both Canadian and U.S. companies impacted by President Trump’s escalating trade war.
A Canadian flag flies outside the Stellantis Windsor Assembly Plant in Windsor, Ontario, Canada, on … More
Key Facts
François-Philippe Champagne, Canada’s finance minister, said Tuesday automakers that continue manufacturing vehicles in Canada can import “a certain number” of U.S.-made vehicles without tariffs.
A six-month pause was announced for tariffs impacting U.S. goods used in Canadian manufacturing, processing and food and beverage packaging, as well as those used to support public health, health care, public safety and “national security objectives,” though Champagne did not specify which goods would be exempt.
The tariff relief will help Canadian businesses hurt by tariffs on U.S. imports, and support “critical institutions” like hospitals, long-term care facilities and fire departments, Canada’s finance department said.
Canadian Prime Minister Mark Carney earlier this month matched Trump’s 25% tariffs on all imported vehicles not subject to the U.S.-Mexico-Canada trade agreement, and he signaled officials were “developing a framework” to provide relief for auto manufacturers that “maintain their production and investment in Canada.”
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How Will Canada’s Tariff Exemptions Impact U.s. Jobs?
It could affect American workers for some automakers laid off—or about to be—because of the ongoing trade war. Analysts previously estimated about 177,000 U.S. jobs would be cut after Trump announced a 25% tariff on all Canadian imports in February. Stellantis said last week it would temporarily lay off 900 workers at five U.S. facilities while pausing production at one Canadian site, where the company assembles Chrysler Pacifica, Voyager minivans and Dodge Charger Daytona models. General Motors also announced temporary layoffs for 200 workers in the U.S., citing “market dynamics,” according to ABC affiliate WXYZ. General Motors employs about 6,000 workers in Canada, while Ford and Stellantis employ about 5,480 and 8,600, respectively, according to estimates from the automakers. Neither General Motors nor Stellantis immediately responded to a request for comment.
What Has Donald Trump Said About Auto Tariffs?
Trump said Monday he was “looking at something to help some of the companies” impacted by the tariffs he imposed, suggesting some companies “need a little bit of time” to make parts in the U.S. rather than import them. Trump’s 90-day pause on his tariff policy did not include Canadian goods, imported vehicles or a 25% tariff on steel and aluminum.
Key Background
Trump imposed sweeping tariffs across U.S. trade partners on April 2, a day Trump referred to as “Liberation Day.” He announced 25% tariffs on imported cars in late March, with auto parts set to face similar levies no later than May 3. Some industry analysts argue Trump’s policy would impact new car sales in the U.S., including Cox Automotive, which lowered its full-year forecast from 16.3 million vehicles to 15.6 million in 2025 while citing “economic uncertainty, affordability,” and other impacts from tariffs. Other analysts reportedly expect industry costs for importing and making vehicles to increase by as much as $100 billion. Ford CEO Jim Farley warned automotive tariffs would “blow a hole in the U.S. industry that we’ve never seen,” and claimed talks of tariffs brought about “cost and chaos” for automakers.”
Further Reading
These Cars—Chevrolet, Ford, Jeep And More—May Be More Expensive As Trump’s Auto Tariffs Take Effect Today (Forbes)
Trump Implies Tariff Relief For Car Companies—Sending Ford, GM, Stellantis Stocks Jumping (Forbes)
Source: https://www.forbes.com/sites/tylerroush/2025/04/15/some-us-autos-get-a-tariff-exemption-from-canada-if-they-keep-production-plants/