- X3 and X5 built in Spartanburg do not meet USMCA content compliance standards.
- In 2024, they were the brand’s top-selling vehicles across the Canadian market.
- Local dealerships have confirmed upcoming price hikes across the entire model range.
Canadians who want to get behind the wheel of a new BMW X3 or X5 may soon face some major sticker shock. As a result of the tariff war between the United States and Canada, Munich’s US-built models may become significantly more expensive, potentially forcing some locals to look elsewhere for their premium SUV fix.
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Read: BMW Just Hiked Prices On Its Super Sedan And Wagon Without Adding Anything New
Last year, the X3 and the X5 were the two top-selling vehicles for the brand in Canada, accounting for 7,128 and 4,489 units respectively. However, neither complies with the United States-Mexico-Canada Agreement (USMCA), meaning they are subject to a range of different tariffs.
Why the SUVs Miss the Mark
More specifically, they are believed to have no more than 33 percent content from the US, Canada, or Mexico, which is well below the 75 percent threshold required for compliance. As noted by Auto News, they also use engines and transmissions imported to the States from Europe, which exposes them to 25 percent tariffs even before their assembly commences in Spartanburg.
When the completed vehicles pass across the Canadian border, they are subject to an additional 6.1 percent tax, bringing the total up to 31.1 percent. If BMW were to pass on this entire fee to customers, the price of a $50,000 model could increase by upwards of $15,000 – and by the same token, a $100,000 model could be subjected to a $31,000 price hike.
In both cases, we’re talking about a considerable amount that could put a number of buyers off and result in them opting for a rival brand instead.
Rising Prices Across the Lineup
It’s understood that BMW’s Canadian arm intends to increase prices to counter these tariffs, although it’s not yet clear by how much. What has been confirmed is that MSRPs will rise across the entire lineup, not just the models directly affected by the taxes, allowing the company to spread out the financial impact caused by Donald Trump‘s financial policy.
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At the same time, the new status quo has also impacted demand for the X3 and X5 in Canada. Through the second quarter, sales of the two models fell by approximately 25 percent compared to the same period in 2024. As such, the proportion of US-made BMW models sold in the country dropped from 51.1 to 38.3 percent.
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