President Donald Trump’s tariffs just cost America a chunk of Canadian business.
Subaru, which sold 68,043 cars in Canada in 2024, is reshuffling its supply chain in response to escalating car trade scuffles.
The company sold over 17,700 American-built vehicles in Canada last year, making up 26 percent of its 2024 sales.
But the Canadian division of the Japanese automaker is planning to significantly reduce US imports to only 10 percent by the 2026 model year, which translates to a substantial loss in both cars and revenue.
The biggest impact will be on the American-built Outback. The popular car will no longer ship north after 2026.
Instead, it will feature a ‘made in Japan’ badge.
Subaru Canada’s CEO, Tomohiro Kubota, said the move will ‘minimize the impact of the counter surtax,’ according to Automotive News Canada.
For Subaru, it’s cheaper to build and ship cars out of Japan than deal with the political whiplash of US trade policy.
Canada’s Subaru showrooms will now be supplied with more Japanese-built cars
Subaru, a Japan-based manufacturer, already operates plants in its home country, supplying Canadian dealerships with popular models like the Crosstrek and Forester SUVs.
Subaru didn’t say if the adjustment will facilitate any production or job changes in Indiana.
Previously, the company said the plant will begin assembling the Forester, one of its American best-sellers, later this year.
It’s unclear if any of those units will end up crossing the border.
At this year’s New York International Auto Show, the company’s CEO, Atsushi Osaki, said the brand is committed to staying in the US market.
‘We are dedicated to offering our American customers a wide range of options to meet their evolving needs,’ Osaki said.
Subaru declined to comment on this story.
The primary reason behind Subaru’s decision to cut back on US imports is the 25 percent import tax imposed by Trump earlier in the year on vehicles from almost all countries, including Canada.
The company just launched a new design for the popular Outback
Subaru’s CEO, Atsushi Osaki, said the company is commited to the US market
The Outback is built in Indiana – the company may shift its production in response to the tariffs
Lawmakers in Ottawa snapped back with retaliatory tariffs of its own, hitting US-built cars with duties up to 25 percent.
Multiple car companies have been caught in the middle. For decades, the US and Canada have enjoyed free trade agreements allowing products to flow over the borders.
American companies, including Stellantis and Ford, built giant factories in Canada, while international automakers built US plants and shipped products up north.
Trump’s tariffs effectively ripped up the agreements, including the USMCA agreement he renegotiated and signed during his first administration.
The President has consistently said that his trade policies will force automakers to build their vehicles in the US.
So far, his tariffs have had a mixed response from automakers.
Stellantis attributed a 900-job layoff to the tariffs, Honda announced that the Civic Hybrid will have a final assembly plant in the US, and GM said its ramping up production of its high-priced, American-made pickups.
Volvo also discontinued the S90 sedan from the US market.
Multiple US automaker executives told DailyMail.com that American trade wars, combined with Trump’s tariff waffling, have made them unsure about how to even set a price for their products.
