Canada has announced significant cuts to the number of U.S.-made vehicles that Stellantis NV and General Motors Co. (GM) can import without tariffs, following both automakers’ decisions to scale back manufacturing operations within the country.
According to a statement issued by the Department of Finance, GM’s annual tariff-free import quota has been reduced by 24.2%, while Stellantis faces a 50% reduction. The move comes as part of Ottawa’s broader efforts to uphold commitments under Canada’s auto remission framework, which rewards automakers that maintain production and investment within the country.
The government’s decision, announced jointly by Finance and National Revenue Minister François-Philippe Champagne and Industry Minister Mélanie Joly, directly links the reductions to the automakers’ failure to meet their local manufacturing commitments.
“These unacceptable decisions are in contravention of their legal obligations to Canada and Canadian workers,” Champagne said. “Our government will not hesitate to protect the integrity of our auto sector and the livelihoods it supports.”
The Canadian government has been tightening trade and manufacturing policies following recent tensions over the U.S.-Mexico-Canada Agreement (USMCA). In April 2025, Ottawa warned it would impose 25% counter-tariffs on vehicles imported from the U.S. that fail to comply with USMCA provisions. However, it allowed automakers to import a limited number of U.S.-assembled vehicles tariff-free — provided they maintain sufficient domestic production.
This reprieve has now been partially withdrawn for GM and Stellantis.
The government specifically cited Stellantis’ cancellation of production at its Brampton assembly plant — where the company had planned to produce Dodge and Chrysler vehicles — and GM’s decision to end BrightDrop electric van output in Ingersoll, citing weaker global demand. Stellantis also announced plans to move Jeep Compass production from Ontario to the United States, further reducing its Canadian footprint.
Industry observers note that these changes could signal a more assertive Canadian stance on enforcing local production requirements. The country is simultaneously investing heavily in its EV and battery manufacturing ecosystem, attracting firms like Volkswagen and Honda to build gigafactories on Canadian soil.
Neither GM nor Stellantis immediately responded to Reuters’ requests for comment.
The development, first reported by CBC News, adds a new layer of tension to North America’s auto trade landscape — as governments balance industrial protectionism with global supply chain realities.
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