Ottawa cuts number of US vehicles Stellantis and GM can import tariff-free

The federal government is hitting back at Stellantis and General Motors by cutting the number of tariff-free vehicles that automakers can import from the U.S. to sell in Canada.

As CBC News first reported, both multinational manufacturers will no longer be exempt from paying Canada’s retaliatory tariffs on many U.S.-assembled vehicles as before.

The move is an effort to pressure companies to reinvest in Canadian production and workers to recoup these profits and avoid large tariff bills.

“This action follows the automakers’ unacceptable decision to reduce their manufacturing presence in Canada, which is in direct violation of their commitments to the country and Canadian workers,” the government said in a media release late last night.

Ottawa is taking action after Stellantis announced its plans to expand in the US, including moving its production of the Jeep Compass in Brampton, Ontario, to Illinois.

General Motors also confirmed Tuesday that it is ceasing production of its BrightDrop electric delivery vans at a plant in Ingersoll, Ontario, due to demand.

In April, the federal government offered auto companies an exemption from Canada’s 25 percent retaliatory tariffs on the U.S. auto sector.

But this benefit came with some conditions: automakers had to continue making vehicles in Canada and complete already planned investments.

If companies broke that condition, the government warned it would reduce how many tariff-free vehicles it could import from the US.

Finance Minister François-Philippe Champagne and Industry Minister Mélanie Joly issued a joint statement saying that Stellantis and GM had breached “their legal obligations to Canada.”

Ministers announced that the government is reducing the amount of US-assembled vehicles GM can import tariff-free and cutting the amount of Stellantis by 50 percent, with immediate effect.

Flavio Volpe, president of the Automotive Parts Manufacturers Association, said, “I think Canadians and the industry want the government to be tough on companies that don’t own those partnerships that are worth billions in many cases.”

“This is a great step forward.”

But Hugh Williams, national spokesman for the Canadian Automobile Dealers Association, says the government’s response will hurt Canadian consumers.

“The higher the tariffs you have, the higher the prices of vehicles,” Williams said.

“We have been clear with this government that when your trading partner shoots you in the foot, it is not a good idea to take out another gun and shoot yourself in the other foot.”

Trump is playing ‘hardball’

Unifor national president Lana Payne said she thinks Ottawa’s “carrot and stick approach” will work.

Payne said US President Donald Trump is playing “hardball” right now and is “extorting corporations” to try to shift production to the US.

“He’s doing everything he can to surgically destroy our industrial economy in Canada, including the auto industry,” Payne told CBC. Power and politics.

“If we don’t take strong action against him and against these companies, we will lose everything.”

Jolie has also threatened legal action against Stellantis, noting that the government has given millions of dollars to the company to keep its C.Anadian footprint.

He posted on social media Thursday that he met with GM, the Ontario government and the union to talk about next steps for workers and that he expects an update in 15 days.

Ontario Premier Doug Ford has threeGM is prepared to sue if it violates its contract and cannot find a new product for the Ingersoll plant.

Prime Minister Mark Carney said Thursday that GM has indicated it will honor its obligations to pay workers, but that is not enough.

“We are not satisfied with this,” he said.

In an announcement with Ford, Carney said they are working to explore what else can be done with the GM plant and whether it could be part of Canada’s upcoming defense industrial strategy. Carney is working on a plan to move Canada away from excessive dependence on the US

Carney also pointed to ongoing talks with the Trump administration to provide relief to some sectors from US tariffs.

The Prime Minister warned that if Canada does not make progress on those negotiations, the government will “do whatever is necessary to protect our workers.”

“That starts with building out, taking control over there. But it’s also not unreasonable access to our market if we don’t have access to another market,” Carney said. “We’re not at that point.”

Trump has indicated he wants to dominate auto manufacturing. The White House is hitting Canada’s auto sector by imposing a 25 per cent tariff on all finished vehicles that do not comply with the Canada-U.S.-Mexico Agreement (CUSMA).

U.S. Commerce Secretary Howard Lutnick told an audience in Toronto this month that he wants to eliminate auto assembly from Canada.

Canada is in talks with the US to try to reduce tariffs on the auto sector. But Carney suggested Thursday that talks in Washington are now focused on trying to provide relief to the steel and aluminum sector, which was hit hard by Trump’s earlier taxes.

Conservative Leader Pierre Poilievre took aim at Carney Thursday morning, saying he has broken his promise to negotiate a victory with Trump and protect Canada’s auto sector.

“We really need to keep our promise and defend auto workers in our negotiations with Americans,” Poilievre said.

Stellantis and GM have not yet responded to CBC News’ requests for comment.