More than a year after the Donald Trump administration imposed extensive tariffs on cars, most manufacturers prefer to pay them rather than invest billions in new American factories, CNN reports.
Toyota announced last week that it would move half of the production of its best-selling pickup, the Tacoma, from Mexico to an expanded plant in San Antonio. Trump welcomed the move as proof that "tariffs work", but Toyota stated that tariff policy was not decisive, but rather a long-term strategic decision.
The share of imported cars on the US market last year was 46 per cent, only slightly less than 47.7 per cent in 2024. Part of that drop is due to the gradual withdrawal of cheaper imported models such as the Nissan Verse from sale.
"Building a factory is a huge commitment and it would be almost foolish to embark on it hastily. Therefore, it is safest not to do anything," said Ivan Drury, director of analytics at the car buying site Edmunds.
Tariffs significantly cut profits. Toyota paid 8.4 billion dollars in them in the last fiscal year, causing its North American business to move from profit to loss. General Motors paid 3.1 billion in 2025, and Ford one billion dollars.
Tariffs are not entirely without effect. General Motors has announced the relocation of the assembly of two SUV models from Mexico to the US and will replace one Buick model imported from China with a vehicle produced in America. However, this production will also take place in existing plants in Kansas and Tennessee, not in new ones.
Further uncertainty is introduced by the renegotiation of the US-Mexico-Canada Agreement (USMCA): Trump last month announced the possibility of withdrawing from the agreement if there are no changes in favour of American companies. The association representing General Motors, Ford and Stellantis therefore called for a "quick and permanent solution" that would give the industry long-term security for capital-intensive investments.
Experts estimate that replacing imports with new American plants would take years and cost billions of dollars, with labour costs higher than in Mexico. Since trade policies can change faster than a plant can be built, and sales rose by two per cent last year despite record prices, it pays for manufacturers to continue importing.
