US automaker Honda is shifting its production plans for the new Civic from Mexico to Indiana in an effort to avoid tariffs imposed by President Donald Trump. The company had initially planned to manufacture the next-generation Civic in Guanajuato, Mexico, starting in November 2027.
However, with the imposition of a 25% tariff on vehicle imports from Canada and Mexico, Honda has decided to move its production to Indiana instead. According to sources, the new facility will produce around 210,000 vehicles annually.
Experts say that Trump’s pledge to return manufacturing to the US by imposing tariffs on rival nations is having an immediate impact. “I think Trump has been effective at using tariffs, and the threat of tariffs, to get more made-in-America jobs here,” said Stephen Moore, economist and senior fellow at The Heritage Foundation.
The move is seen as a victory for Trump, who has been pushing for increased manufacturing in the US. However, investors on Wall Street are not celebrating, with all three major indexes finishing sharply lower.
Honda’s decision to move production to Indiana reflects the challenges posed by Trump’s tariffs. The company had initially considered producing the Civic in Mexico or Canada due to cheaper production costs. However, the imposition of the 25% tariff has made it more expensive to manufacture in these countries.
Other automakers, such as BMW and Volkswagen, may also follow Honda’s lead by expanding their production capabilities or re-opening closed factories.
The tariffs have sparked concerns about inflation and job losses in the auto industry. A new study from consulting firm Anderson Economic Group predicts that car prices in the US could surge by up to $12,000 after the tariffs take effect.
Honda currently sends around 80% of its Mexican output to the US, with the new production facility expected to increase this percentage even further. The company’s decision to move production to Indiana is seen as a response to Trump’s tariffs and efforts to boost US manufacturing jobs.
Source: https://nypost.com/2025/03/03/business/honda-moves-civic-production-plans-to-indiana-from-mexico-to-avoid-tariffs-report