BMW Canada is about to restart shipments of its most important vehicles—the Spartanburg-built X-series SUVs—even if doing so means swallowing one of the nastiest tariff cocktails in the auto industry.
After a months-long pause triggered by Canada’s retaliatory 25 percent tariff on U.S.-built cars (a response to President Donald Trump’s global auto import levy), Canadian dealers are bracing for fresh arrivals of the X3, X4, X5, X6, X7, and the halo XM. For retailers, the move comes not a moment too soon. Inventory of Spartanburg models has been all but drained, leaving showrooms short on BMW’s biggest moneymakers.
The gap hit hard. The X3 and X5—BMW’s Canadian best-sellers in 2024—fell 25 percent in sales by Q2 of this year. Together, U.S.-built SUVs once accounted for more than half of BMW Canada’s business. By mid-2025, they were down to just 38 percent. Dealers say the X1, X2, and i4 helped cushion the blow, but for many stores, losing the X3 and X5 felt like losing the spine of the lineup.
Still, BMW Canada somehow eked out a 5.3 percent sales gain in Q2 thanks to a surge in European imports. But ask any retailer, and they’ll tell you the comeback of Spartanburg SUVs is about survival, not just growth.
The Tariff Math: Brutal
Getting them back on the lot won’t be cheap. Because Spartanburg’s SUVs don’t meet the 75 percent North American content threshold under the USMCA—thanks largely to engines and transmissions shipped in from Europe—they’re sitting ducks for double duty. First comes the U.S.’s 25 percent tariff on imported parts. Then Canada slaps on its own 25 percent countertariff, plus a 6.1 percent most-favored-nation duty. The all-in hit? Roughly 31 percent.
On a $100,000 X5, that’s about $31,100 in tariffs alone—before transport, dealer margins, or profit. To spread the pain, BMW Canada isn’t just raising prices on U.S.-built SUVs; it’s hiking stickers across the entire lineup. Tariff-free models like the X1 and 3 Series will get pricier too, a move dealers hope will keep Spartanburg vehicles from looking prohibitively expensive.
What’s Next
There’s a glimmer of relief ahead. Dealers say a plug-in hybrid BMW X3 built in South Africa is bound for Canadian shores, sidestepping the tariff squeeze entirely. But for now, customers who want an X3, X5, or XM will pay more—possibly a lot more.
In the near term, though, most BMW dealers seem willing to take that tradeoff. “We can’t survive on just X1s and 3 Series,” one dealer told Automotive News. “We need Spartanburg back, whatever the cost.”
BMW Canada may not be saying much officially, but the message is clear: tariffs or not, the SUV backbone of the brand is rolling north again.
Source: BMW