Canada Plans New Auto Policy to Counter U.S. Tariffs

[Policy Shift] Canada plans to unveil a new automotive industry strategy in February 2026, offering market access in exchange for local manufacturing and opening the door for Chinese automakers to build plants in the country.

Key Development: Canada and China Reach Agreement to Lower EV Tariffs

In response to the Trump administration’s imposition of a 25% tariff on imported vehicles starting April 2025, Canada is accelerating its efforts to decouple its auto industry from the United States. The new policy aims to tie preferential market access to domestic production and, for the first time, permits Chinese automakers to establish manufacturing facilities in Canada, thereby reshaping North America’s supply chain.

Critical Data: Thousands of Jobs at Risk as Plants Shut Down

Due to U.S. tariffs, General Motors has closed a plant in Ontario, and Stellantis has canceled its Jeep production line near Toronto, shifting capacity to Illinois, USA, putting thousands of Canadian workers at risk of job loss.

Strategic Foundation: Economic Autonomy Emerges as Core Priority

Amid ongoing tensions in U.S.-Canada trade relations, Canada is leveraging its recent trade truce with China to reduce dependence on the U.S. and rebuild its industrial ecosystem. The success or failure of this policy could determine the future structure of the North American automotive landscape.