NEW YORK, (Reuters) – Global automakers plan billions of dollars in new U.S. investments to boost production and avoid President Donald Trump’s tariffs, but they are awaiting clarity on the status of a North American free trade agreement and future vehicle duties.
The auto industry has urged the Trump administration to extend the United States-Mexico-Canada Agreement that faces a review this year. Car companies call the trade deal crucial to American auto production.
Toyota has announced plans to invest $10 billion in the U.S. over the next five years but only offered details on about $2 billion.
“Where we build, what we build, is all in flux so to speak,” Toyota Division General Manager David Crist told Reuters on the sidelines of the New York Auto Show. “It’s hard to make those decisions with a 25% USMCA tariff. I think we have to get more clarity on that before we finalize every decision within the $10 billion, but that investment is coming.”
Hyundai has announced a $26 billion investment in the U.S. through 2028. The company showed off a concept SUV and said it plans to build a new mid-size truck by 2030 in the U.S.
Hyundai CEO Jose Munoz said the company aims to get to 80% of vehicles sold in the U.S. produced in America and boost U.S. production from 800,000 cars to 1.2 million. “We want to invest here,” Munoz told Reuters at the show. “This is our most important market.”
Last year, Hyundai told the Trump administration that uncertainty about USMCA was delaying investment decisions.
“Early confirmation of USMCA’s extension would immediately unlock over $20 billion in new American investments. Every month of ambiguity slows job creation, site selection and technology development,” Hyundai said.
Volkswagen unveiled a new version of its Atlas SUV on Wednesday that is being produced at its Tennessee plant.
“When you look at the investment volumes and also lead times to build up a product portfolio and supply chains, stability is just so important,” Kjell Gruner, president and CEO of Volkswagen Group of America, told Reuters.
Nissan’s lowest-cost cars for the U.S. market are produced in Mexico but that is a challenge given tariffs, said Christian Meunier, chairman of Nissan Americas. “The problem is, they’re not made in the U.S., and it’s a very big challenge to build very affordable cars in the U.S. because of the labor rate,” he told Reuters.
Nissan is increasing production at its Tennessee plant and bringing a new Rogue hybrid to the plant next year. The tariffs were “a good thing for Nissan, because it forced us to accelerate the localization of our production,” Meunier said.
Reporting by David Shepardson and Kalea Hall; Editing by David Gregorio
