Canada will allow domestic car manufacturers to import “a certain number” of passenger vehicles and light trucks assembled in the U.S. duty free, the country’s Department of Finance announced in a press release Tuesday.
The new policy applies to vehicles imported between April 9, 2025, and April 8, 2026, according to an official from the Department of Finance Canada.
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.
Companies will be required to report on their production and investment levels on a quarterly basis to the Minister of Finance and the Minister of Industry, according to an official with the Department of Finance Canada.
The quantity of duty-free imports allowed for manufacturers will be determined on an individual company basis, per the official, although those numbers will not be made publicly available to protect businesses from competitive implications.
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.
Editor’s note: This story has been updated to provide additional details from the Department of Finance Canada about the tariff exemptions.
