Canada announces 3 ‘remissions’ for industries, automakers amid tariff war with US | Check details

The Canadian government has announced ‘remissions’ for industries amid a tariff war with the US. Finance Minister François-Philippe Champagne announced, “We’re giving Canadian companies and entities more time to adjust their supply chains and become less dependent on US suppliers.”

The Canadian government announced three new measures, including a pause, reduction in tariffs and loans, in retaliation to President Donald Trump's imposition of stringent tariffs on the Maple country.

Canada's annual inflation surprisingly slowed in March to 2.3 per cent, three notches below the prior month, largely helped by lower gasoline and travel tour prices, data showed on Tuesday.

US President Donald Trump's tariffs on various Canadian imports and Canada's retaliatory measures are expected to increase prices but also suppress economic growth.

What Are The Measures Announced By Canada?

Support for Automakers Through Reduced Tariffs

In an apparent reward system for Canadian automakers, the Champagne-led Finance Ministry announced an incentive for automakers who continue producing cars in Canada and meet their investment commitments. These manufacturers will be allowed to import a limited number of US-made vehicles without paying extra tariffs, encouraging domestic production while maintaining cross-border trade.

Labelling it as ‘performance-based remission’, the official statement said, “In recognition of the integrated nature of the North American automotive sector, this will allow automakers that continue to manufacture vehicles in Canada to import a certain number of US-assembled, CUSMA-compliant vehicles into Canada, free of the countermeasure tariffs that Canada has imposed.”

“The remission granted to these companies is contingent on these automakers continuing to produce vehicles in Canada and on completing planned investments,” the statement added.

The Canadian government also warned the automakers that the number of tariff-free vehicles a Canadian company is permitted to import from the US will be reduced if there are reductions in Canadian production or investment.

Canada Pauses Tariffs for 6 months on key US goods

The Canadian government also announced a temporary 6-month relief from tariffs (extra import taxes) on certain goods coming from the US.

These goods are:

• Used by Canadian manufacturers (like factories or food processors)
• Used for health and safety (like hospitals, long-term care homes, and fire departments)

Why is Canada Pausing Tariffs?

Canada's finance minister announced that the six-month pause aims to help these businesses and organisations stay competitive and keep running smoothly, especially if they depend on US supplies.

But it’s only temporary — just for six months.

The idea is to give these groups time to adjust their supply chains and start using Canadian-made products instead.

Canada Announces Large Enterprise Tariff Loan Facility

The Canadian government is offering loans to help large, important Canadian businesses stay afloat during the trade crisis—if they commit to keeping jobs and operations in Canada.

The Canadian government has launched a new programme called the Large Enterprise Tariff Loan Facility (LETL). The government warned that “those that were already involved in insolvency proceedings before this crisis will not be eligible."

This programme is for big Canadian companies that:

• Play an important role in food, energy, the economy, or national security,
• Are struggling to get regular loans because of the trade dispute with the US
• And were financially healthy before this trade issue started.

US-Canada Tariff War

On March 4, 2025, the United States imposed 25 per cent tariffs on Canadian goods under the International Emergency Economic Powers Act, prompting Canada to retaliate with 25 per cent tariffs on $30 billion worth of US imports, including spirits, appliances, apparel, and motorcycles.

Shortly after, on March 12, the US introduced 25 per cent tariffs on all steel and aluminium products, to which Canada responded with reciprocal 25 per cent tariffs on $12.6 billion of steel, $3 billion of aluminium, and an additional $14.2 billion of US goods such as tools, computers, and sporting equipment.

The trade tensions escalated further on April 3, when the US imposed 25 per cent tariffs on Canadian automobiles, applying to the non-US content of CUSMA-compliant vehicles.

Canada countered on April 9 by imposing 25 per cent tariffs on non-CUSMA-compliant US-made vehicles and on the non-Canadian and non-Mexican content of CUSMA-compliant vehicles, intensifying the ongoing trade dispute between the two nations.

The tariff war effectively threatens the highly integrated North American automotive supply chain, where parts often cross borders multiple times before final assembly.

Analysts warn that these tariffs could add thousands of dollars to vehicle costs, disrupt production, and jeopardise Canadian auto sector jobs, which employ over 125,000 people.