Japan’s second-largest automaker is reportedly looking to avoid President Trump’s expected tariffs by moving the production of one of its top-selling cars to America from Mexico.
With the auto industry concerned about the impact of Mr. Trump’s decision to impose 25 percent tariffs on imports from Canada and Mexico, Honda says it is changing its plans for where its next-generation Civic will be produced, according to a report from Reuters.
Honda originally planned on manufacturing its next-generation Civic at Guanajuato, Mexico, with production scheduled to begin in 2027. The company attributed its decision to manufacture the car in Mexico to rising costs in America.
However, the automaker is reportedly concerned that the tariffs could send costs skyrocketing. It is now reportedly planning on producing the vehicle in Indiana starting in May 2028, the tail end of Mr. Trump’s second term.
The company expects to produce roughly 210,000 cars annually, and if it failed to meet the goal in Indiana, it would import cars from countries that do not have tariffs.
Representatives for Honda did not respond to the Sun’s request for comment.
The tariffs had been delayed for a month, but last week, Mr. Trump said they would go into effect on March 4. Commerce Secretary Howard Lutnick told Fox News’ “Sunday Morning Futures” that Canada and Mexico have “done a lot” to curb the flow of migrants and drugs into America.
He called the situation “fluid” and suggested they may not be exactly 25 percent. However, he said the tariffs would go into effect on Tuesday.
Honda executives have previously signaled that tariffs could impact their production plans. The chief operating officer of the car maker, Shinji Aoyama, said in November that if tariffs became permanent, the company would look at shifting more production to America.
In February, Mr. Aoyama predicted that the tariffs could have a “$20 billion plus impact” on Honda.
The company sold 1.4 million cars and trucks in America in 2024, and 40 percent of those sales were vehicles that were imported from Canada and Mexico. More than 240,000 of its sales in America were Civics.
Honda is not alone in voicing concern about the impact of the tariffs. The CEO of Ford Motor Co., Jim Farley, said the tariffs would be “detrimental to the U.S. auto industry.” Meanwhile, the CFO of General Motors said the taxes might force the company to shift production to America.
Mr. Trump said he is imposing the tariffs because Mexico and Canada are not doing enough to curb the flow of illegal immigrants and fentanyl into America. However, economic analysts are speculating that the president plans to use the tariffs as leverage during negotiations over the renewal of the U.S.-Mexico-Canada Agreement later this year to push the two countries to agree to his desired revisions of the deal.
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Publish date : 2025-03-03 03:55:00
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