Canadian Finance Minister François-Philippe Champagne announced that auto manufacturers continuing to produce their vehicles within Canada will be exempt from retaliatory tariffs recently imposed by Ottawa in response to decisions by the U.S. administration.

Champagne clarified in statements reported by "Radio Canada International" that companies will be granted the right to import a specified number of assembled vehicles from the U.S. without being subject to tariffs, provided they comply with the terms of the Canada-United States-Mexico Agreement (CUSMA).

He added that the exemption will be conditional on companies continuing to invest and produce within Canada, emphasizing that the exempt quotas will automatically decrease if local production declines or investment levels drop.

This decision comes in the wake of former U.S. President Donald Trump imposing a 25% tariff on all automotive imports to the United States on April 3, with a partial exemption for vehicles produced under the trilateral agreement.

The Canadian government responded by imposing similar tariffs on exported U.S. cars to the Canadian market, in a move it said aims to protect the national industry and ensure balanced trade treatment.