Honda is reportedly weighing plans to relocate a significant portion of its North American vehicle production to the U.S., according to a recent report by Nikkei. The move comes in response to the Trump administration’s newly imposed 25% tariff on imported vehicles, which has prompted manufacturers to reevaluate cross-border supply strategies.
Japan’s second-largest automaker by sales aims to manufacture 90% of its vehicles sold in the U.S. within the country, the report said. This shift would represent a production increase of up to 30% over the next two to three years.
While Honda has not officially confirmed the plan, the report aligns with earlier coverage from Reuters, which noted the company intends to build its next-generation Civic hybrid at its Indiana facility instead of in Mexico. The decision is believed to be part of a broader effort to mitigate tariff-related cost increases.
“Honda declined to comment, saying the information was not announced by the company,” according to Nikkei.
The U.S. remains Honda’s largest market, comprising nearly 40% of its global sales. In 2024, the automaker sold approximately 1.4 million vehicles in the country.
President Donald Trump said April 14 he is considering temporarily exempting the auto industry from the 25% tariffs he previously imposed, citing the need for carmakers to adjust supply chains currently reliant on Canada, Mexico and other countries.
“I’m looking at something to help some of the car companies with it,” Trump told reporters in the Oval Office, adding, “They need a little bit of time because they’re going to make them here, but they need a little bit of time.”
The possible move would be another in a series of tariff reversals from the administration, which has rattled financial markets and drawn criticism from economists who warn of lasting damage to consumer and business confidence.
When first introduced March 27, Trump had described the auto tariffs as “permanent.” However, his latest comments continue a pattern of shifting trade measures in response to economic and political pressure. Last week, the president lowered broader tariffs from 25% to 10% for a 90-day negotiation period. Simultaneously, tariffs on Chinese imports rose to 145%, though electronics received a temporary reprieve with a reduced 20% rate.
“I don’t change my mind, but I’m flexible,” Trump said, a statement emblematic of the policy volatility that has unsettled investors. While the S&P 500 posted modest gains April 14, it remains down nearly 9% for the year. Interest rates on 10-year U.S. Treasury notes stayed elevated around 4.4%.
Carl Tannenbaum, chief economist at Northern Trust, described the administration’s frequent shifts as disorienting. “Damage to consumer, business, and market confidence may already be irreversible,” he warned in a recent analysis.
Abby Andrews