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According to Carscoops, Subaru is making strategic moves to curb costs amidst the ongoing trade war.
In 2023, Subaru sold 68,043 vehicles in Canada, with 26% (approximately 17,700 units) being produced in the US. As a retaliation to President Donald Trump’s new tariff policies, Canada imposed a 25% import tax on American-made cars.
To mitigate the impact of this new tariff, Subaru has decided to shift production of Canada-bound models out of the US. This move, as reported by Carscoops, could potentially cost the US millions in lost revenue.
By 2026, Subaru plans to produce only 10% of its Canada-bound vehicles in the US. “This will help us minimize the impact of the additional import tax,” said Tomohiro Kubota, CEO of Subaru Canada, in an interview with Auto News Canada.
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Currently, the production of the Subaru Outback for the Canadian market remains in the Lafayette, Indiana plant, but it will soon be relocated to Japan. The Indiana plant will then be restructured to manufacture the Forester, the brand’s second most popular model in Canada after the Outback. However, it is unclear if these Foresters will be exported to Canada.
Carscoops also notes that Subaru is one of the few longstanding automakers without any production facilities in Canada. Thus far, the Japanese brand has relied on its US plants to supply the Canadian market under the US-Mexico-Canada Agreement (USMCA).
Subaru is not alone in its efforts to minimize the impact of the trade war. Volvo has laid off hundreds of workers in the US, and other automakers have frozen imports into the country. Carscoops predicts that regardless of the outcome, the global automotive industry will undergo significant changes in the future.
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