Canada signs deal with South Korea to explore bringing auto manufacturing to Canada

On Jan. 29, 2026, Canada announced an agreement with South Korea to explore bringing Korean automotive manufacturing to the country, a move the government linked to U.S. tariffs that it says threaten Canada’s auto industry. The accord, scarce on details, was presented as part of Prime Minister Mark Carney’s effort to diversify Canada’s trade away from the United States in response to what the government described as a volley of tariffs from President Trump.

Industry Minister Mélanie Joly said in a statement, "This agreement will grow our auto sector, create good jobs and reinforce Canada’s position as a global leader in future-ready vehicle manufacturing." Mr. Trump has imposed a 25 percent tariff on Canadian vehicles and said the United States does not need autos from Canada.

The announcement comes after a string of production moves by automakers. The Times reports that Stellantis abandoned the retooling of a Brampton, Ontario, factory and moved production of a new Jeep model to Illinois; General Motors closed an electric delivery van plant in Ontario and will cut a shift at its pickup truck plant in the province; and a Ford assembly line in Oakville has been idle since May 2024, with plans to retool for large pickup trucks but no start date set.

Mr. Carney also recently said Canada would allow a small number of Chinese electric vehicles into the country at a low tariff rate, a step Canada and China suggested could open the door to Chinese carmakers’ investments.

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