President Donald Trump’s plan to impose widespread tariffs on foreign goods aims to persuade foreign manufacturers to produce their goods in factories in the United States and employ Americans.
During a recent interview with the conservative network Newsmax, Trump said this effort had already produced results.
“We have automobile plants being built at levels we’ve never seen anything like it, and they’re going up fast,” Trump said on March 26.
Asked for evidence, the White House cited recent expansion plan announcements from carmakers Hyundai, Stellantis and Honda.
However, automotive industry experts say Trump exaggerated. In most cases, these announcements represent reallocations of investments at existing facilities, not newly built plants. And they may or may not come to fruition.
It is premature for the president to take credit for plant expansion given his short time in office, said Dimitry Anastakis, a University of Toronto business history professor and author of the 2024 book The North American Auto Industry since NAFTA. “Plants are planned years in advance,” he said.
We found no data to confirm that the spate of recent announcements amounts to a record-setting level of automotive manufacturing investment.
Which carmakers have announced new investments recently?
Three foreign-based carmakers have recently said they would invest significant sums in US production.
Hyundai: In February, the South Korean carmaker announced that it would increase its production capacity at its Metaplant in Georgia from 300,000 to 500,000 vehicles per year, producing both electric vehicles and hybrids. It also announced that it would increase output by an unspecified amount at its Alabama plant, which currently produces 356,100 vehicles per year.
In March, Hyundai announced at a White House event that it was initiating a roughly $21bn investment in the US, including a $5.8bn steel plant in Louisiana to provide material for the company’s electric vehicles.
Hyundai Motor Co CEO Jose Munoz told Axios that “the best way” for the company to “navigate tariffs is to increase localisation”.
Honda: In March, the Reuters news agency reported, based on unnamed sources, that the Japanese carmaker would manufacture its next-generation Civic hybrid vehicle in Indiana rather than Mexico.
Honda had initially planned to manufacture the next-generation Civic in Guanajuato, Mexico, starting in November 2027. But it now plans to build the new Civic at an existing plant in Greensburg, Indiana, beginning in May 2028, with an expected annual production of 210,000, according to Reuters.
Stellantis: In late January, the Dutch company that owns Chrysler, Jeep, Fiat and other car brands announced that it would invest $5bn in the US, including reopening an assembly plant in Belvidere, Illinois, that once produced Jeep Cherokees and had been shuttered since February 2023. The company now plans to make midsize trucks there starting in 2027.
Why experts say caution is warranted
A closer look at the three companies’ announcements highlights differences with Trump’s framing.
First, they are announcements of plans set to occur several years from now, which means that the companies could modify the plans before they come to fruition.
Second, none of the moves involves “automobile plants being built”, as Trump put it, but ramping up production at existing plants or reopening a closed plant. Hyundai’s planned Louisiana steel plant will provide materials for EVs.
Greig Mordue, a manufacturing policy professor at McMaster University, said companies like Hyundai, Honda and Stellantis are likely preparing to accelerate already decided launches to adapt to political realities.
“They will be looking at models that will be coming to the end of their natural cycle, something that occurs at five or so year intervals, and getting ready to announce ‘investments’ to continue the new version of the model at those plants,” Mordue said. “Those launches can be positioned as ‘wins’” for Trump.
Auto manufacturing investment was on upswing before Trump
We did not find any long-term data to put the scope of the three recent carmaker announcements into a historical context, but the past few years have seen something of a renaissance in new automobile manufacturing investment, much of it in electric vehicles.
From 2000 to the end of September 2024, companies announced $208.8bn of investments in EV manufacturing and the creation of about 240,000 jobs, according to Atlas Public Policy, a research and consulting firm in Washington, DC.
A big factor in this development, experts said, are two laws signed by President Joe Biden, the Bipartisan Infrastructure Law and the Inflation Reduction Act, which provided federal incentives to redouble the US manufacturing base.
Of the $208.8bn of investments tracked by Atlas, more than half was announced since Biden signed the Inflation Reduction Act in 2022. About three-quarters of that investment was under construction or was operational by October 2024, the group said.
“It’s clear that this is part of an ongoing, multi-year trend upwards,” said Atlas founder Nick Nigro.
Other types of manufacturing have also seen a distinct uptick since the passage of those laws; according to the Treasury Department, overall manufacturing construction spending, adjusted for inflation, has doubled since the end of 2021.
The Trump White House downplayed the value of Biden-era investments, pointing to a Financial Times analysis that found roughly 40 percent of the investments funded since the Inflation Reduction Act and another Biden-signed bill, the CHIPS and Science Act, were paused or delayed, totalling $84bn.
The White House also cited news reports of auto manufacturers that abandoned EV goals in 2024, including Volvo, Ford and Mercedes-Benz.
Still, the same uncertainty that plagued some of those past planned investments could also affect announcements made in recent weeks. Building a plant, or even increasing production at an existing one, can take years, and it remains to be seen whether these plans will come to fruition.
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