The Globe and Mail reports in its Wednesday, April 16, edition that Ottawa is using a carrot-and-stick strategy to encourage automakers to remain in Canada amid the trade war with the United States. A triple bylined item led by Steven Chase reports that Ottawa is offering relief from retaliatory tariffs on U.S. vehicle imports but warns that this will be revoked if production or investment in Canada declines. Additionally, the federal government is granting domestic manufacturers in other sectors a six-month exemption from Canadian tariffs on U.S. imports to help them adjust their supply chains. Canada imposed retaliatory tariffs on approximately $60-billion in U.S. goods in March.
Finance Minister Francois-Philippe Champagne announced a tariff remission plan allowing automakers to import a limited number of vehicles free from Canada's 25-per-cent retaliatory levies, based on their Canadian production and investments. This tariff was imposed in early April and is reduced based on Canadian and Mexican content. This will allow automakers to sell lines of cars not assembled in Canada without facing a countertariff markup of as much as 25 per cent. Ottawa did not announce the exempt-import numbers for each automaker.
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