Subaru moves car production out of US to avoid Canadian trade wars

Japanese car giant Subaru will move its production of cars out of the United States as the Trump administration has imposed tariffs on goods and services from a variety of nations. Subaru sold over 68,000 cars in Canada in 2024, but the company is reconfiguring its supply chain to avoid the trade war. 

According to the Daily Mail, the company sold over 17,700 cars in Canada that were made in America last year, making up about a quarter of all sales. But in 2026, Subaru's Canada location will slash US imports down to 10 percent of all cars sold in Canada and will instead import more inventory from Japan.

After 2026, the American-built Outback will no longer ship into Canada from the US, all models will instead be made in Japan. According to the outlet, the move from Subaru is meant to "minimize the impact" of the counter tariffs that have been imposed by the Trump administration, Subaru CEO Tomohiro Kubota said. For the car giant, it will be cheaper to build and ship out of Japan to deliver the cars in Canada. 

The Trump administration imposed a 25 percent tariff on cars and related parts that would be imported into the United States from Canada. Unlike some of Trump's reciprocal tariffs that have been paused for 90 days, the tariffs on the vehicles are still in place, putting strain on the ability to import and export cars and car parts between the US and Canada.

The policies imposed by Trump have pushed some other car companies to invest more in the US, including Stellantis and others. However, the move from Subaru went the opposite direction. Although there has been a mixed response in the auto industry over the tariffs connected to cars, the reciprocal tariffs have pushed many countries to the negotiating table to make deals with America on trade.