President Donald Trump’s wishy-washy tariff announcements have destabilized the global economy and sent trust in the U.S. economy plummeting, but some countries that the Republican tariffs targeted are fighting back. Trump slapped goods imported from China with a 145% tariff, and China retaliated with an 84% tariff on American imports. Trump initially saddled Canada with a 25% tariff on Canadian-built vehicles imported into the U.S., so Canada issued a retaliatory 25% tariff, and is not backing down. Neither is Subaru Canada, whose CEO Tomohiro Kubota just announced that it will stop only importing Foresters built in America, and instead mainly import them directly from Japan, who has a free-trade deal that allows imports to enter Canada tariff free.
Subaru sold about 68,000 vehicles in Canada last year, and 26% of them were imported from Subaru’s United States factory in Lafayette, Indiana. Subaru Canada aims to reduce the number of vehicles imported from the U.S. to just 10% of its annual sales.
Changes are coming to Subaru’s Lafayette plant
Last year, Subaru sold 11,101 Outbacks, 2,755 Ascents, 138 Legacys, and 3,719 Crosstreks in Canada that were all imported from the brand’s sole North American production facility in Lafayette, Indiana. In January, Subaru of America’s COO Jeff Walters announced that Subaru’s Lafayette plant will stop producing Outbacks for both the Canadian and U.S. markets, instead exclusively building the seventh-generation Outback at its Gunma, Japan facility.
Later this year, Subaru’s Indiana manufacturing facility will begin producing Foresters for the first time ever outside of Japan in place of current Outback production. Forester production will continue in Japan as well as in the U.S., and Subaru Canada plans to import cars from both plants, though it will have to rely heavily on Japanese Foresters to reduce its U.S. imports to 10%. Automotive News reports,
“Whether Canadian buyers will be driving American- or Japan-built Foresters when the 2026 models begin rolling off assembly lines is not certain. Subaru Canada would not comment on its import plans for the Forester beyond the current model year….
While fitting Canadian vehicle production into the optimal plant will help Subaru Canada skirt tariff costs, Kubota said pricing changes are still likely at the company’s 96 dealers across Canada.”
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