Motor manufacturers who continue to manufacture vehicles in Canada will be exempt from retaliatory customs duties imposed by Ottawa, while US President Donald Trump is trying to disrupt the North American industry with high import rights.
The Federal Minister of Finance, François-Philippe Champagne, announced Tuesday that car manufacturers will be authorized to import a certain number of vehicles assembled in the United States-those which comply with the Canada-Mexico Free Trade Agreement (ACEUM)-without being subjected to customs countermeasures imposed by Ottawa in response to Mr. Trump’s samples.
The number of vehicles exempt from customs duties that a company is authorized to import will decrease in the event of a reduction in production or Canadian investments.
“Mr. Trump, he attacks our automotive industry. This is the truth. The situation is very difficult, ”said Prime Minister Mark Carney on Tuesday.
“The North American automotive sector is the most integrated industrial manufacturing sector in the world, in particular the Canadian-American automotive sector,” said Carney. The customs duties imposed by President Trump therefore constitute, to a certain extent, an attempt to dismantle this integration and the advantages which result from it. »»
The liberal chief made this comment in response to a question from the media during his campaign in Saint-Eustache, Quebec.
On April 3, Donald Trump imposed customs duties of 25 % on all imports of cars in the United States, but ordered partial exclusion for vehicles built as part of the ACEUM. In response, Ottawa has imposed similar customs duties on vehicles made in the United States for Canada.
Customs duties on import parts in the United States were to enter into force no later than May 3. Mark Carney said he did not believe that these customs duties would be applied now. The Liberal chief said he had communicated with the CEOs of car manufacturers in Canada and elsewhere in the world.
Conservative chief Pierre Hairyis also reacted, during a campaign stage in Montreal on Tuesday. “I condemn Trump for his unjustified and non-justifiable prices,” he said. It is appalling that he continues to threaten Canada with prices when he has paused on the prices elsewhere in the world. »»
NPD chief Jagmeet Singh said in another campaign stage in Montreal that Canada must fight to delete Donald Trump’s customs duties and “must think of all possible tools to protect jobs and keep our factories.”
Customs duties should increase prices
The customs duties imposed by the American president have shaken the North American automotive sector. Vehicles cross the Canadian-American border on several occasions before being completed, and experts claim that customs duties will increase prices.
The Canadian and American automotive industries are officially integrated into the 1965 automotive pact.
Mexico joined the continental automotive industry in the 1990s with the North American free trade agreement (Alena). This agreement was replaced under the first Trump administration by ACEUM, which strengthened protections in the automotive sector.
Honda Canada denied information on Tuesday reporting possible changes in Canadian production, claiming that its Alliston factory, Ontario, would work as much as possible in the predictable future and that no change was currently being envisaged.
The three giants of Detroit – Ford, General Motors and Stellantis – Press the Trump administration for months. The tenant of the White House suggested on Monday that a new break on customs duties in the automotive sector could be set up to give companies “a little time” to transfer their capacities in the United States.
The White House spokesperson Karoline Leavitt provided no details when she was questioned on Tuesday’s comments concerning the automotive sector, but said Trump “had a certain flexibility.”
On the subject of the change of tone adopted by Donald Trump with regard to Canada, Mme Leavitt said the president maintained his position.
“The United States subsidizes Canada’s national defense and he believes that Canadians would greatly benefit from becoming 51e State, ”said Ms. Leavitt.
Tuesday, Mr. Champagne also announced assistance to Canadian companies affected by the commercial conflict in order to give them time to adapt their supply chains.
Ottawa has announced its intention to grant a temporary exemption from six-month customs duties for goods imported from the United States and used in the Canadian sectors of manufacturing, processing and packaging of food and drinks. This temporary exemption will also apply to goods used to support public health, health care, public security and national security.
The measure must help “employers who were viable before the recent trade measures of the United States to maintain its activities and regain financial stability,” the ministry said in a statement released on Tuesday morning. However, companies while benefiting will have to “deploy efforts to maintain jobs and support commercial activities in Canada,” he said.
Companies already involved in an insolvency procedure before the American customs duties crisis are, however, not eligible.
The global markets have been in turmoil since Donald Trump launched, then partially suspended, his “reciprocal” rights earlier this month. An import rate of 10 % is still in force for most countries, as well as specific rights in sectors such as aluminum, steel and automobile.
The American president imposed customs duties of 145 % on Chinese imports, and Beijing retaliated by imposing 125 % retaliatory rights on American products.
Strong concern of Canadians
A new survey suggests that Canadians express a strong concern in the face of the recent volatility of stock markets linked to American customs duties, and that they are more worried than Americans of the impact of customs duties on their finances.
The light survey was carried out with 1630 Canadian adults and 1007 American adults from April 11 to 13. As the survey was carried out online, no margin of error can be assigned to it.
According to these results, 78 % of Canadian respondents – and as many Quebec respondents – worried the volatility of the stock markets. Most Canadian respondents, 87 %, and Quebec respondents, 86 %, said they believed that new customs duties would affect their personal finances, compared to 78 %of Americans.
Léger performs weekly surveys on customs duties and indicates that more Canadians and Americans have said that they have found an increase in consumer prices during the last week.
