(Reuters) -General Motors and Stellantis will no longer be exempt from paying Canada’s retaliatory tariffs on as many U.S.-assembled vehicles as before, CBC News reported on Thursday.
The federal government of Canada is limiting the number of tariff-free vehicles the automakers can import from the U.S. to sell in the country, according to the report.
In April, Canada said it would impose 25% counter-tariffs on all vehicles imported from the United States that are not compliant with the U.S.-Mexico-Canada trade deal.
However, the Canadian finance ministry later said auto manufacturers will be allowed to import a certain number of U.S.-assembled, free-trade-compliant vehicles if they continue to produce vehicles locally and complete planned investments.
The Canadian government now believes that Stellantis and GM are no longer meeting the requirement of locally produced vehicles or investments, so Ottawa is lowering their remission rate quota until the companies live up to their promises, according to CBC.
Stellantis announced plans to move its Jeep Compass production from Ontario to the U.S., and General Motors ended BrightDrop van output in Ontario, citing weaker demand.
Canada is reducing GM’s annual remission quota by 24% and Stellantis’ by 50%, the report said.
Reuters could not immediately verify the report. GM, Stellantis and the Canadian government did not immediately respond to requests for comment.
(Reporting by Chandni Shah in Bengaluru; Editing by Alan Barona)
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