President Donald Trump’s plan to impose widespread tariffs on foreign goods is aimed at convincing foreign manufacturers to produce goods in US factories and employ Americans.
In a recent interview with conservative network Newsmax, Trump said the effort has already produced results.
“We’re building automotive factories to a level where we’ve never seen anything like that, and they’re rising rapidly,” Trump said on March 26.
In search of evidence, the White House cited recent announcements of expansion plans from automakers Hyundai, Stellantis and Honda.
However, automotive industry experts say Trump is exaggerating. In most cases, these announcements represent reallocation of investments in existing facilities rather than newly constructed plants. And they may or may not.
Dimitry Anastakis, a professor of business history at the University of Toronto and author of the North American automotive industry since NAFTA in 2024, is too early for the president to praise the plant’s expansion, given his short time in office. “The plants were planned many years ago,” he said.
No data was found to confirm that the recent announcement’s Satch corresponds to a record level of automotive manufacturing investments.
Which automakers have announced new investments recently?
The three foreign automakers have recently said they will invest a large sum of money in US production.
Hyundai: In February, the Korean automaker announced that its production capacity at Metaplant in Georgia will increase from 300,000 to 500,000 units a year, and will produce both electric and hybrid vehicles. It also announced that the Alabama plant, which currently produces 356,100 vehicles per year, will be increasing the power output by an unspecified amount.
In March, Hyundai announced at a White House event that it would launch an investment of around $21 billion in the US, including Louisiana’s $5.8 billion steel plant, providing materials for the company’s electric vehicles.
Jose Muñoz, CEO of Hyundai Motor Co, told Axios that the company “navigating tariffs is to increase localization.”
Honda: In March, Reuters news agency reported that Japanese automakers would manufacture the next-generation civic hybrid vehicles in Indiana, not Mexico, based on unknown sources.
Honda originally planned to manufacture the next generation of Civic in Guanajuato, Mexico from November 2027, but now, according to Reuters, it plans to build new citizens at its existing factory in Greensburg, Indiana from May 2028.
Stellantis: In late January, the Dutch company that owns Chrysler, Jeep, Fiat and other auto brands announced that it would invest $5 billion in the US, including the reopening of its assembly plant in Belvidea, Illinois.
Why experts say they need to be careful
A closer look at the announcements of the three companies highlights the differences from Trump’s framing.
First, they are announcements of plans that are expected to occur in a few years. This means that businesses can change plans before they come true.
Second, as Trump said, the movement will not “automobile plants are being built,” but will increase production with existing plants and resume closed plants. Hyundai’s planned Louisiana Steel Factory will provide materials for EVs.
Greig Mordue, a manufacturing policy professor at McMaster University, said it is likely that companies like Hyundai, Honda and Stellantis are preparing to accelerate the launches already decided to adapt to political realities.
“They are looking at models that come at the end of the natural cycle, which occurs at about five years of intervals and are preparing to announce “investments” to continue the newer version of the model with those plants,” says Mordue. “These launches will be positioned as ‘wins’ for Trump.”
Automotive manufacturing investments were rising before Trump
Although we have not found long-term data to put the scope of the recent three automaker announcements into historical context, we have seen something like a Renaissance in new automotive manufacturing investments over the past few years.
From 2000 to the end of September 2024, companies announced investments in EV manufacturing and creation of approximately 240,000 jobs, according to Atlas Public Policy, a research and consulting firm in Washington, DC.
He said the two laws signed by President Joe Biden, the bipartisan infrastructure law and the Inflation Reduction Act provided federal incentives to double down US manufacturing sites.
Of the $208.8 billion investments tracked by Atlas, more than half have been announced since Biden signed the Inflation Reduction Act in 2022. Approximately three-quarters of that investment were under construction or operated by October 2024.
“It’s clear that this is part of an ongoing multi-year trend,” said Nick Negro, founder of Atlas.
Other types of manufacturing have seen a clear increase since the passage of these laws. Overall manufacturing construction spending adjusted to inflation has doubled since the end of 2021, according to the Treasury.
The Trump White House downplayed the value of Biden-era investments, pointing to an analysis of the Financial Era, a separate Biden-signature bill, a total of $840 billion in chips and science laws.
The White House also cited news reports from automakers who abandoned their EV goals in 2024, including Volvo, Ford and Mercedes-Benz.
Still, the same uncertainty that has plagued some of the planned investments in the past could have an impact on announcements made in recent weeks. Building plants and even increasing existing production can take years, and it remains to be seen whether these plans will come true.
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