BMW Canada Revives American-Made X3, X5 Models Despite 31% Import Tariffs
BMW Canada is resuming imports of its U.S.-built SUVs, including the X3, X4, X5, X6, X7, and XM, from its plant in Spartanburg, South Carolina. This move comes after a pause in deliveries due to tariff penalties imposed by Ottawa in response to U.S. President Donald Trump's tariff on global vehicle imports.
The pause in deliveries has drained inventory, leaving several retailers with little to offer in BMW's most popular segment. However, the X1 and X2, built outside the U.S., remain unaffected.
Sales of the X3 and X5 had fallen 25% year over year by the second quarter of 2025. U.S.-built models accounted for 38.3% of BMW Canada's total sales in the same quarter, down from 51.1% a year earlier.
Imports from Europe - led by the X1, i4, and 3 Series - have helped fill some of the gap caused by the pause in deliveries of U.S.-built X models. Engines and transmissions shipped in from Europe keep the Spartanburg-built X models below the 75 per cent threshold required for tariff exemption.
BMW Canada is planning to raise prices across its entire lineup to offset the tariff burden. On a $100,000 SUV, tariffs alone add around $31,100. Tariff-free vehicles will also see higher sticker prices due to the price increases.
Dealers stressed that the X3 and X5 remain the backbone of their business, often representing more than half of store volume. The plug-in hybrid BMW X3, manufactured in South Africa, may be introduced to the Canadian market in the near future.
BMW Canada declined to confirm the restart directly, but stated they are exploring multiple avenues to ensure steady vehicle supply. The name of the BMW spokesperson in Canada actively working on securing a stable supply of vehicles is not publicly specified.
In 2024, the X3 and X5 were BMW's two best-selling models in Canada, with 7,128 and 4,489 units sold respectively. U.S.-assembled vehicles made up nearly half of BMW's Canadian volume in 2024. The tariff burden on Spartanburg-built X models is roughly 31.1 per cent, consisting of U.S. tariffs, Canadian countertariff, and most-favored nation duty.
The tariff penalties are among the steepest in the auto industry. BMW Canada, instead of pushing price increases solely onto the U.S.-built models, plans to spread them evenly across its entire lineup. This move aims to maintain the affordability of its vehicles for customers while ensuring a steady supply of BMW SUVs in the Canadian market.
