Your $50,000 BMW may soon face a $15,000 tariff in Canada | Carscoops

      BMW imports engines and transmissions for the X3 and X5 from Europe, making them subject to 25 percent tariffs.

      The X3 and X5 produced in Spartanburg do not comply with USMCA content requirements.

      In 2024, these models were the brand's best sellers in the Canadian market.

      Local dealerships have confirmed that price increases are anticipated across the entire model lineup.

      Canadians interested in purchasing a new BMW X3 or X5 may soon encounter significant price increases. Due to the tariff conflict between the United States and Canada, these US-built models from Munich could become much more expensive, potentially leading some buyers to seek alternatives for their premium SUVs.

      Last year, the X3 and X5 ranked as the two best-selling vehicles for the brand in Canada, with sales of 7,128 and 4,489 units, respectively. However, neither vehicle adheres to the United States-Mexico-Canada Agreement (USMCA), making them subject to various tariffs.

      The SUVs Fall Short

      Specifically, it is estimated that they contain no more than 33 percent content sourced from the US, Canada, or Mexico, which is significantly below the 75 percent minimum required for compliance. According to Auto News, since they utilize engines and transmissions imported from Europe, they incur a 25 percent tariff even before assembly in Spartanburg begins.

      When the final vehicles cross into Canada, they face an additional 6.1 percent tax, raising the total tariff burden to 31.1 percent. If BMW passes this entire cost onto consumers, a $50,000 model could see an increase of over $15,000, while a $100,000 model could experience a price hike of $31,000.

      In both instances, these substantial increases could discourage many buyers, causing them to consider rival brands.

      Price Increases Across the Range

      It is reported that BMW's Canadian division plans to raise prices in response to these tariffs, though the specific amount is yet to be determined. What has been confirmed is that the manufacturer's suggested retail prices (MSRPs) will go up across the entire lineup, not just for the models directly impacted by the tariffs, allowing the company to distribute the financial impact resulting from Donald Trump's trade policy.

      Moreover, the new circumstances have affected demand for the X3 and X5 in Canada. By the end of the second quarter, sales of these models dropped by roughly 25 percent compared to the same timeframe in 2024. Consequently, the share of US-made BMW vehicles sold in the country decreased from 51.1 to 38.3 percent.