Ottawa on Tuesday offered tariff relief to automakers on condition they maintain production in Canada, as Honda was reportedly considering moving assembly lines from Canada and Mexico to the United States.
Under the plan, companies that continue to manufacture vehicles in Canada would be allowed to import a certain number of cars and trucks made in the United States tariff-free, the government said.
Canada has imposed a 25 percent tariff on vehicle imports from the United States, in retaliation against President Donald Trump’s levies on autos and parts imported from Canada.
The Canadian tariffs applied to cars and light trucks that are not compliant with an existing North American free trade pact. Likewise, US auto tariffs provide some reprieve for compliance under the pact.
The tariff relief, Ottawa said in a statement, was contingent “on automakers continuing to produce vehicles in Canada and on completing planned investments.”
At an election campaign stop in Quebec province, Prime Minister Mark Carney accused Trump of “attacking our auto industry” and seeking to “pull apart the most integrated industrial manufacturing sector in the world.”
“This is one of the crown jewels of North American manufacturing,” he said, vowing to fight for jobs in the sector that is already starting to see layoffs and reduced shifts.
The Nikkei newspaper reported earlier that Honda was considering moving some of its car production from Canada and Mexico to the United States to avoid the US tariffs.
About half of the 1.4 million vehicles it sold in the US last year were imported from Canada and Mexico.
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