President Donald Trump’s impending tariffs are pressuring auto manufacturers, prompting at least one company to announce a major investment in a key Midwestern red state on Sunday.
Over the weekend, Honda’s North American executives revealed that the company’s next-generation Civic hybrids will be assembled at an existing plant in Indiana. The move shifts production from a facility in Mexico as Honda seeks to avoid the tariffs. Trump has threatened to impose a 25% tariff on all imports from Mexico by midnight Tuesday unless President Claudia Sheinbaum strengthens her commitment to curbing the flow of deadly drugs and illegal immigrants.
Honda had originally planned to manufacture its latest fleet of Civics at a plant in Guadalajara beginning in 2027. However, with the recent shift, production will almost certainly take place in Greensburg, Indiana, home to Honda’s only manufacturing facility in the state. A company spokesperson declined Reuters’ request for comment but stated that Honda would continue evaluating demand and the broader business environment when making global production and allocation decisions.
The outlet, which first reported the news, noted that automakers initially favored Mexico but reconsidered after it became evident that President Trump was serious about implementing tariffs at the start of March. A base model 2025 Honda Civic currently sells for $24,250, and a 25% tariff would likely push that price above $30,000 before any additional features.
So far, President Trump has expressed dissatisfaction with Mexico’s efforts to combat fentanyl trafficking. In response, President Claudia Sheinbaum recently announced that her government would deploy an additional 10,000 troops to the U.S. border to deter illegal crossings. Honda, Japan’s second-largest automaker behind Toyota, originally chose Mexico due to Indiana’s higher labor costs. However, Chief Operating Officer Shinji Aoyama cautioned that the new tariffs would make the Midwestern red state a more competitive manufacturing hub.
The company sold over 240,000 Civics in the U.S. last year, second only to its CR-V model, marking a 21% year-over-year increase, according to WishTV. Currently, about 40% of Civics are manufactured and imported from Canada and Mexico, while Honda exports another 60,000 vehicles to both countries annually—shipments that could also face significant setbacks if retaliatory tariffs are imposed.
Honda is not the only company shifting its focus toward U.S. manufacturing. Last week, Apple announced plans to open a 25,000-square-foot AI facility in Houston by the end of 2026, part of a broader $500 billion domestic investment. These investments mark economic victories for President Trump, reinforcing earlier moves by Saudi Arabia and the launch of Stargate, a $100 billion initiative led by OpenAI, SoftBank, and Oracle to accelerate artificial intelligence development within the U.S.