{"id":798116,"date":"2026-07-13T01:11:08","date_gmt":"2026-07-13T01:11:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/798116\/"},"modified":"2026-07-13T01:11:08","modified_gmt":"2026-07-13T01:11:08","slug":"after-a-year-of-tariffs-automakers-are-still-resistant-to-moving-production-to-the-us","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/798116\/","title":{"rendered":"After a year of tariffs, automakers are still resistant to moving production to the US"},"content":{"rendered":"

\n Toyota announced last week it would do something other automakers have been reluctant to do \u2013 shift some production from Mexico to the United States.\n <\/p>\n

\n The Japanese automaker will soon build half of its best-selling midsize Tacoma pickups at an expanded plant in San Antonio, where it already builds the Tundra full-size pickup and Sequoia SUV. But it will also continue to build Tacomas in Mexico.\n <\/p>\n

\n President Donald Trump heralded the shift<\/a> to US soil, calling it \u201ca really big deal\u201d and proof of \u201cTariffs at work!\u201d\n <\/p>\n

\n Toyota didn\u2019t cite tariff policy as the catalyst.\n <\/p>\n

\n \u201cWhile we are impacted by evolving trade policies, our investments are multi-decade decisions based on broader strategic goals,\u201d the company told CNN.\n <\/p>\n

\n And more than a year after the Trump administration announced sweeping auto tariffs to spur construction of new American factories, Toyota\u2019s move is the exception, not the rule.\n <\/p>\n

\n Few automakers have announced plans to move production to the United States. Most automakers would rather pay tariffs than spend billions to build new facilities \u2013 and the product lines that are coming to the US are moving into existing factories.\n <\/p>\n

\n Forty-six percent of the cars purchased by US consumers last year were imported, according to Mobility Global, down only slightly from 47.7% in 2024. Some of that drop was because automakers wound down the sale of imported vehicles with lower price tags, such as the Nissan Versa<\/a>.\n <\/p>\n

\n But there are too many costs and too much uncertainty for automakers to make widespread changes in their factory footprints.\n <\/p>\n

\n \u201cIt\u2019s a huge commitment (to build a factory) and to do it on a whim would be borderline crazy,\u201d said Ivan Drury, director of insights at car buying site Edmunds. \u201cSo the safest action is no action. Continue on, even with that increased (tariff) cost.\u201d\n <\/p>\n

\n And one way that automakers keep costs down is under threat \u2013 the US-Mexico-Canada Agreement, or USMCA<\/a>, the trade agreement reached during Trump\u2019s first term.\n <\/p>\n

\"A<\/p>\n

\n That deal is now up for renegotiation, and Trump suggested last month he\u2019d walk away from it if there weren\u2019t substantial changes in favor of American companies. That terrifies automakers that have come to depend on parts being able to move freely across US borders with Canada and Mexico.\n <\/p>\n

\n \u201cWe urge a swift and durable resolution that ensures a level playing field and provides long-term certainty needed for capital-intensive automotive investments,\u201d said a statement from the American Automakers Policy Council, a trade group representing General Motors, Ford and Stellantis.\n <\/p>\n

\n Tariffs are taking a bite into earnings. Toyota paid $8.4 billion in duties in its most recent fiscal year, swinging its North American results from a profit to loss. General Motors paid $3.1 billion in tariffs in 2025, and Ford paid $1 billion.\n <\/p>\n

\n Which isn\u2019t to say that the tariffs have been completely ineffective in incentivizing companies to move production back to the US. In addition to the Toyota Tacoma, last year General Motors said it would shift the assembly of two SUVS from Mexico. It will also stop importing a Buick SUV from China and will build a replacement model in the US.\n <\/p>\n

\n But those vehicles will go to an existing plant in Kansas and another plant in Tennessee. Those facilities had room after GM cut back on massive investment into EV production after Trump and Republicans in Congress ended government support for electric vehicles.\n <\/p>\n

\n For Toyota, there are also business reasons beyond trade policy to shift production to San Antonio, said Patrick Anderson, a Michigan economist and expert in the auto industry.\n <\/p>\n

\n \u201cToyota has been very successful at growing its truck business in the United States, and their San Antonio production is already the mainstay of that in the United States,\u201d he said. \u201cSo it makes natural business sense to consolidate existing operations.\u201d\n <\/p>\n

\"An<\/p>\n

\n And even with tariffs as high as they are, it doesn\u2019t make sense for automakers to shift production based on trade policies that can shift much faster than it takes to build a factory.\n <\/p>\n

\n Experts say it would take the automakers years, and cost them billions, to build enough new US plants or expand existing ones to replace imported vehicles, especially when Trump\u2019s successors can just as easily reverse his policies. Labor costs in the US are also higher than in Mexico and some other countries.\n <\/p>\n

\n Demand is also strong \u2013 total vehicles sales rose 2% last year, even with record high car prices \u2013 which motivates automakers to keep imports flowing.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Toyota announced last week it would do something other automakers have been reluctant to do \u2013 shift some…\n","protected":false},"author":2,"featured_media":798117,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48],"class_list":["post-798116","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/798116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=798116"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/798116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/798117"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=798116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=798116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=798116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}