Trump’s Tariffs Have Major Car Maker Moving Production to Indiana from Mexico [WATCH]

Honda is shifting production of its next-generation Civic model from Mexico to Indiana, a move aimed at avoiding President Donald Trump’s 25% tariffs on vehicles imported from Mexico and Canada, according to a report from Reuters.

The Japanese automaker had originally planned to begin production of the new Civic in Guanajuato, Mexico, in November 2027, but sources familiar with the matter say Honda will now manufacture the model in Indiana, starting in May 2028.

The facility is expected to produce approximately 210,000 vehicles per year.

#BREAKING: Honda to now build the new Civic model in Indiana, not Mexico, because of Trump’s tariffs – Reuters

210,000 Civics per year. pic.twitter.com/2NKLyo9wZK

— Eric Daugherty (@EricLDaugh) March 3, 2025

Elon Musk Called This Financial News ‘Terrifying’

Honda’s decision follows a growing trend of automakers reevaluating production plans in response to Trump’s tariff policies.

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The administration’s push for higher domestic production has already influenced major industry players.

In January, rival automaker Stellantis reversed its decision to close an Illinois plant, following a meeting between Chairman John Elkann and President Trump, during which Stellantis committed to boosting U.S. manufacturing jobs.

Meanwhile, Volkswagen is reportedly exploring U.S. production sites for its Audi and Porsche brands, seeking to avoid the proposed tariffs, according to a German news outlet.

A source told Reuters that Honda originally favored Mexico over Indiana or Canada due to lower production costs.

Mexico has been a key hub for Honda, which currently exports 80% of its Mexican-made vehicles to the U.S., the world’s second-largest auto market behind China.

Honda’s U.S. sales remain crucial to its business, with the company reporting 1.5 million vehicles sold in the U.S. in 2023.

BREAKING: Honda will build the new Civic Hybrid in Indiana instead of Mexico to avoid Trump’s proposed tariffs on imported vehicles. pic.twitter.com/83JhbbHUVR

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This included more than 240,000 Civics, marking a 21% increase from the previous year.

The Civic, one of Honda’s most affordable and best-selling models, has played a critical role in the company’s success in the U.S. market.

Shinji Aoyama, Honda’s chief operating officer, warned last year that if Trump imposed tariffs on vehicle imports, Honda would need to shift production to the U.S.

Currently, 40% of Honda vehicles sold in the U.S. are imported from Mexico and Canada.

In contrast, Honda exports about 60,000 U.S.-made cars to Mexico and Canada each year.

However, the automaker could face additional costs if Mexico and Canada retaliate with their own tariffs.

Canadian Prime Minister Justin Trudeau had initially announced 25% tariffs on U.S. imports in early February but agreed to pause them for 30 days while Trump’s administration did the same.

The pause period is set to expire on Tuesday, leaving uncertainty over whether both countries will move forward with their tariff plans.

Mexican President Claudia Sheinbaum also said Monday that her administration is waiting to see whether Trump will impose the tariffs before making a final decision on retaliatory taxes.

In February, Sheinbaum indicated that Mexico planned to levy countermeasures but has not yet provided specifics on the size or timeline of potential tariffs.

Despite the uncertainty surrounding Mexico and Canada’s response, Secretary of Commerce Howard Lutnick confirmed on Sunday that Trump’s planned tariffs will take effect on Tuesday.

With automakers scrambling to adjust production strategies, Honda’s decision to move Civic production to Indiana signals a larger industry shift as companies work to navigate the changing trade landscape under the Trump administration.

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