Made in the USA
BMW manufactures the vast majority of the vehicles it sells in North America in the U.S. The automaker has operated a plant in Spartanburg, South Carolina for over 30 years.
Right now, that means that vehicles manufactured there and brought into Canada are subject to Canadian counter-tariffs imposed in response to the U.S. administration’s tariffs on imported Canadian vehicles and components.
So far. the effects of the trade war have been mitigated for consumers because BMW Canada had models in stock. That is about to change.
Resumption of imports
As reported by Automotive News, falling inventory levels have led BMW Canada to plan a resumption of imports of the X3 and X5 SUVs, the brand’s most popular models in Canada. The scenario will be the same for the X4, X6, X7 and XM, all assembled in the U.S.
Note that the X1 and X2 are manufactured elsewhere and are not affected by tariffs, at least not directly.
BMW Canada stopped importing the X3 and X5 in the spring, according to what three of the country's dealers told Automotive News. Now that stocks are running dry, imports will resume despite the customs duties.
And to clarify, last week's announcements from the Canadian government regarding the removal of certain counter-tariffs do not affect the automotive sector.
Effects on sales
In 2024, the X3 and X5 were BMW's best-selling models in Canada with 7,128 and 4,489 units sold respectively, according to figures from the Detroit Automotive News Research & Data Center. Overall, sales of vehicles assembled in the U.S. accounted for 48.4 percent of the company's Canadian volume in 2024.
This year, the tariffs have hurt. Sales of the X3 and X5 fell by about 25 percent in Canada during the second quarter of the year compared to the same period in 2024. Overall, U.S.-made vehicles accounted for 38.3 percent of BMW Canada's sales in Q2 of 2025, down from 51.1 percent for the same period the previous year.
A barrage of tariffs
BMW's vehicles do not contain enough parts from Canada, the U.S. or Mexico to comply with CUSMA (Canada-United States-Mexico Agreement) standards. It’s estimated that one-third of the parts come from North America, a far cry from the 75 percent ratio required for compliance, which would make the vehicles exempt from tariffs.
What's more, the engines and transmissions come from Europe, so they are subject to tariffs upon entering the U.S. before being taxed again upon entry into Canada.
One dealer mentioned that BMW planned to increase the price of its vehicles and that the costs will be spread equally across the company's lineup to mitigate the effect on the most affected models versus those that are not.
In other words, even if the vehicle you want is not subject to tariffs, you will still pay more for it.