Electric Dreams or Economic Nightmares? Honda’s Exit Rattles Allies

With billions in EV investments hanging in the balance, Honda’s move reignites fears of U.S. protectionism

Honda Motor is reportedly working on a plan to shift production of certain vehicle models from Mexico and Canada to the United States in response to the additional 25% tariff imposed by President Donald Trump on all imported vehicles, according to Japanese business outlet Nikkei.

According to the newspaper, Honda could increase U.S. production by up to 30% within the next two to three years, allowing the company to meet 90% of U.S. vehicle sales with domestically built cars.

In response to these reports, Canadian Finance Minister François-Philippe Champagne is scheduled to speak Tuesday with senior Honda executives in Japan to clarify the information regarding a possible shift in production.

Canada’s public broadcaster CBC reported that Champagne stated in a press release that Ottawa will address the issue directly with Honda in Japan, though it is not yet clear whether the company’s Canadian production will be affected.

CBC also noted that Canada’s Minister of International Trade, Dominic LeBlanc, discussed the situation on Monday with the Premier of Ontario, where Honda’s main assembly plant in Canada is located.

Last year, Honda announced an investment of 10.8 billion U.S. dollars to build four new electric vehicle production facilities in Ontario.

The transfer of production is considered a direct consequence of the tariffs that President Donald Trump has placed on the automotive sector.

Honda’s assembly plant in Alliston, Canada, currently produces the Civic and CR-V models. The facility employs about 4,200 workers and has an annual production capacity of 390,000 vehicles.

In 2024, Honda announced a $15 billion CAD investment ($10.8 billion USD) to construct four new electric vehicle production sites, including a new assembly plant, in Ontario.