Japanese automaker Subaru (FUJHY) announced last week a major overhaul of its North American supply chains, a costly blow to U.S. exporters in President Trump’s escalating trade war.
Following Canada’s response to Trump’s auto tariffs, Subaru’s Canadian division will stop importing the popular Outback model from the U.S., CEO Atsushi Osaki revealed last week.
Instead, Canadian dealers will now source their Outbacks directly from Japan, thanks to a free trade agreement that allows Japanese vehicles to enter Canada tariff-free
In 2024, Subaru sold 68,043 vehicles in Canada, 17,700 of which were built in the U.S.
After Trump initiated the tariffs on Canadian auto parts, Canada responded with duties of up to 25% on vehicles made in the U.S.
Subaru’s swift move to adjust its supply chains appears to have reassured investors who bid up FUJHY shares up more than 5% last week.
The stock closed at $9.16 on April 27 and is now trading higher for the year, with a current market capitalization topping $13.1 billion.
Subaru isn’t alone in rethinking U.S. production
Subaru is among several automakers reworking their North American operations in response to the new tariffs.
In April, Mazda Canada announced it would pause production of CX-50 crossovers destined for Canada from its Alabama manufacturing plant.
A Mazda spokesperson said the CX-50 is now in "limited supply" across Canada and that dealerships will stop receiving new shipments beginning May 12. There’s no timeline yet for when deliveries might resume.
Hyundai’s Canadian division is also shifting strategy, sourcing most of its Tucson lineup from Mexico rather than the U.S.
“Production of certain Tucson (gasoline) models destined for the Canadian market has been moved to Mexico,” Hyundai spokesperson Brad Ross said.
“We continue to monitor the potential impact of tariffs on all models and remain prepared to adjust as necessary.”
Meanwhile, Nissan scrapped plans to build electric sedans in the U.S., officially citing “industry market conditions.”
While Nissan pointed to the shrinking sedan market, some analysts speculate the new tariffs are playing a bigger role in the company’s North American rethink.
Your email address will not be published. Required fields are markedmarked