Nissan halts manufacturing of Canadian models due to import taxes
In a move that highlights the escalating trade tensions between Canada and the United States, Japanese automaker Nissan has suspended the production of three models - the Pathfinder, Murano, and Frontier - destined for the Canadian market. This decision comes as a result of retaliatory tariffs imposed by Canada on vehicles that do not comply with USMCA trade rules and have less than 75% of parts from the United States [1][3][4].
The current 25% tariff on these non-compliant vehicles adds approximately $2,700 to $3,000 per vehicle, making exporting them economically unviable for Nissan. To mitigate immediate disruption, Nissan stockpiled a 90-day inventory of these models in Canadian dealerships by July 2025, but this only buys time rather than resolving the issue [1].
The suspension reflects the broader fragility of North American automotive supply chains amid rising trade tensions and changing tariff policies, which Nissan and other automakers face. The impact on Nissan’s financial situation is significant.
The tariff-induced halt disrupts Nissan's sales in Canada, especially for these three models that accounted for a notable share of their Canadian sales. For instance, the Murano sold around 1,286 units in Q1 2025 [3]. Nissan’s U.S. shares have declined by about 26.8% in 2025, reflecting investor concerns over the company's exposure to trade risks and supply chain issues [2].
Additionally, Nissan has delayed EV launches and canceled some planned electric models in North America, compounding growth challenges tied to policy shifts and demand reductions [2]. These developments underscore increased financial pressure on Nissan’s North American operations, highlighting risks from tariff policies and prompting strategic reassessment amid regulatory uncertainty and supply chain strain [1][2][3].
However, Nissan expects that the 25% tariffs on automobiles will decrease, creating conditions to resume production of the models for Canada. The company is also aiming to sell over three billion euros in bonds to bolster its financial position [5].
References: [1] "Nissan halts production of three models for Canada due to tariff dispute." Reuters, 2025. [2] "Nissan's stock plunges as tariff-induced production halt threatens Canadian sales." The Globe and Mail, 2025. [3] "Nissan's Canadian sales take a hit as tariffs force production halt." Automotive News Canada, 2025. [4] "Canada imposes tariffs on U.S. vehicles that don't comply with USMCA." CBC News, 2025. [5] "Nissan plans to sell billions in bonds amid financial challenges." Wall Street Journal, 2025. (This is an advertisement and should not be included in the bullet points.)
What will be the impact on Nissan's business if the 25% tariffs on automobiles persist in the industry's finance sector? This disruption in sales, especially for models like the Pathfinder, Murano, and Frontier, could potentially strain Nissan's financial situation, as they account for a notable share of their Canadian sales.
