After a year of tariffs, automakers are still resistant to moving production to the US
Automakers Resist US Relocation Despite Tariff Pressure
After a year of tariffs automakers – After a year of tariffs, most car manufacturers continue avoiding major production shifts to American soil. While Toyota recently announced plans to move some Tacoma pickup assembly from Mexico to San Antonio, this remains an outlier rather than a widespread trend. The broader industry prefers absorbing tariff costs over undertaking expensive factory construction projects.
Financial Impact Drives Caution
The monetary burden of trade policies has been substantial for major automakers. Toyota faces approximately $8.4 billion in duties, transforming what would have been profits into losses. General Motors recorded $3.1 billion in tariff expenses during 2025, while Ford accumulated around $1 billion. These figures demonstrate why companies hesitate to commit billions more toward new domestic facilities.
After a year of tariffs, import statistics show only modest improvement. Roughly 46 percent of vehicles purchased in the United States last year came from overseas, down slightly from 47.7 percent in 2024. This decline partly reflects automakers discontinuing sales of budget-friendly models like the Nissan Versa rather than relocating production.
Policy Uncertainty Creates Hesitation
Concerns about potential USMCA renegotiation under the Trump administration add another layer of complexity. The American Automakers Policy Council warns that sudden policy changes could disrupt carefully planned operations. Ivan Drury from Edmunds emphasized this sentiment, noting that building a new factory represents a massive commitment. He explained that acting hastily would be nearly irrational, making continued operations despite higher costs the prudent choice.
Some manufacturers are making selective moves anyway. GM plans to shift two SUV models from Mexican facilities and will stop importing Buick vehicles from China for domestic assembly. These changes utilize existing plants in Kansas and Tennessee, which gained capacity after reducing electric vehicle investments. Patrick Anderson, a Michigan-based economist, observed that Toyota’s San Antonio expansion also stems from solid business fundamentals tied to expanding truck demand rather than purely policy motivations.
After a year of tariffs, experts maintain that trade policies evolve more rapidly than construction timelines. Building new facilities requires years of planning and billions in capital expenditure. Meanwhile, American labor costs remain higher than Mexican alternatives, even as vehicle sales grew by 2 percent last year despite elevated pricing. The combination of financial pressure and policy volatility keeps most automakers on the sidelines.
