Subaru Cuts US Exports to Canada Amid Trump Tariff Fallout

By Staff, Agencies

Japanese carmaker Subaru is significantly scaling back its US-manufactured vehicle exports to Canada in response to rising trade tensions sparked by President Donald Trump’s import tariffs.

The move marks a major shift in the company's supply chain and a blow to Trump’s efforts to boost domestic car production.

Subaru Canada announced it will slash the share of American-built vehicles in its lineup from 26 percent in 2024 to just 10 percent by the 2026 model year. This includes ending shipments of the popular American-made Outback to Canada. Future models of the vehicle sold north of the border will be manufactured in Japan instead.

Tomohiro Kubota, CEO of Subaru Canada, told Automotive News Canada the shift is designed to “minimize the impact of the counter surtax,” referring to Canada’s retaliatory tariffs on US-made cars. The 25 percent import tax, introduced by Trump earlier this year, triggered a tit-for-tat response from Ottawa, placing duties of up to 25 percent on US vehicle imports.

For Subaru, it’s now more cost-effective to produce cars in Japan than navigate the uncertainties of US trade policy. The company already operates plants in Japan that supply key Canadian models like the Crosstrek and Forester.

Subaru has not commented on whether the Indiana plant—currently ramping up to produce the Forester for US customers—will experience any production or employment changes due to this decision. CEO Atsushi Osaki reaffirmed the company’s commitment to the American market during the New York International Auto Show, stating, “We are dedicated to offering our American customers a wide range of options to meet their evolving needs.”

Subaru declined to provide additional comments on the changes.

The tariff dispute is part of Trump’s broader push to bring automotive manufacturing back to the US. But the results have been mixed. Stellantis cited the tariffs as a reason for laying off 900 workers, while Honda has relocated final assembly of its Civic Hybrid to the US. GM has also increased production of its high-priced, US-made pickups. Meanwhile, Volvo discontinued the S90 sedan in the US altogether.

Industry insiders say the uncertainty created by Trump’s trade policies is wreaking havoc on pricing and planning. Executives told the Daily Mail that frequent shifts in policy and trade conflicts have left them struggling to set stable pricing models.

Trump’s tariffs have upended long-standing North American trade flows. For decades, American and Canadian auto industries were deeply integrated through free trade agreements, including the USMCA deal that Trump himself renegotiated. But now, international carmakers are rethinking US-based production, and cross-border commerce is facing new hurdles.