President Donald Trump often talks about a thriving U.S. auto industry, fueled by new factories from Canada, Mexico, and Europe that he believes will soon produce American-made vehicles for global markets. At a recent White House event, Trump mentioned the construction or design of numerous car company factories, some coming from China and Mexico. However, there is little evidence to support a significant increase in new U.S. car factory construction. Instead, auto companies are making strategic adjustments at existing plants to align with Trump’s focus on tariffs and policies that are not favorable to electric vehicles.
David Adams, the president of Global Automakers of Canada, contradicted Trump’s statements about automakers relocating from Canada to U.S. facilities, emphasizing that jobs in Canada remain stable. While Adams acknowledged that aggressive tariffs from Trump could eventually impact North American auto production, he highlighted that the industry has not reached that stage yet.
To avoid tariffs, some automakers are repurposing idle factory space in the U.S. to manufacture vehicles that were previously imported and now face tariffs. For instance, Nissan plans to increase production of Rogue SUVs and other vehicles at its Tennessee and Mississippi plants while reducing imports from Japan, which are subject to a 15 percent tariff under a tentative agreement with the Trump administration.
Many car companies are shifting away from commitments to electric vehicles made earlier and focusing more on gasoline-powered vehicle production. This shift involves reversing significant investments in electric vehicle projects announced during the previous administration. General Motors, for example, announced plans to convert a Detroit-area factory to produce gas-powered pickup trucks and the Cadillac Escalade SUV, scaling back on its initial multibillion-dollar electric truck production plan.
The trend toward electric vehicles that gained momentum in the past decade led to a surge in factory spending during the previous administration. However, automakers had started retracting their electric vehicle plans even before the recent election, citing lower-than-expected demand. Industry experts anticipate that Trump’s policies will further dampen interest in electric cars.
The Trump administration views the economy as a central focus, emphasizing tariffs, deregulation, and industrial revitalization. A White House spokesperson highlighted the administration’s trade and energy policies as catalysts for substantial investments in U.S. automaking and significant reductions in regulatory costs. The White House anticipates that as these policies take effect, vehicles will soon be exported from Detroit to showrooms in Tokyo, Frankfurt, and Paris.
The White House reported a decrease of approximately 10 percent in imports of automotive vehicles, engines, and parts in the first quarter of this year, amounting to $421.4 billion USD. While U.S. vehicle production has increased by around 4 percent this year, recent figures indicate production levels below the average of the past decade, according to Federal Reserve data.