🚨 #BREAKING: Honda to now build the new Civic model in Indiana, not Mexico, because of Trump's tariffs – Reuters
210,000 Civics per year. pic.twitter.com/2NKLyo9wZK
— Eric Daugherty (@EricLDaugh) March 3, 2025
In a move that highlights the growing influence of President Donald Trump’s trade policies, Honda has decided to shift the production of its new Civic hybrid to Indiana rather than Mexico. This change, spurred by Trump’s proposed tariffs on goods from Mexico and Canada, will see the automaker producing approximately 210,000 Civics annually at its Greensburg, Indiana plant starting in May 2028. This isn’t just a shift in manufacturing; it’s a clear sign that businesses are adjusting to the reality of Trump’s tariff strategy.
Originally, Honda had planned to manufacture the new Civic in Guanajuato, Mexico, beginning in November 2027. However, the looming threat of a 25% tariff on imports from Mexico changed everything. Honda’s decision is pragmatic—avoid the financial burden of higher tariffs while continuing to provide affordable vehicles to the U.S. market. The move makes economic sense: By producing the Civic in Indiana, Honda sidesteps tariff-related price hikes, ensuring that the popular model remains competitively priced in the U.S.
The shift in production from Mexico to Indiana doesn’t just protect Honda’s bottom line—it brings tangible benefits to the local economy. Job creation is likely to follow, with the Greensburg plant increasing production capacity to meet the demand for the new model. Additionally, the move will boost business for local suppliers and service providers, providing a much-needed economic shot in the arm for the region. The ripple effect of this decision will be felt across various industries, as more parts and services are sourced locally to support the expanded production.
This decision is a direct result of Trump’s tariff policies. The 25% tariffs on Mexico were initially scheduled to go into effect soon but were later used as a bargaining chip, with Commerce Secretary Howard Lutnick calling the situation “fluid.” However, even with the uncertainty surrounding the exact timing of the tariffs, companies like Honda are making proactive moves to protect themselves from potential cost increases. This move isn’t just about Honda—it’s about how American manufacturers are reacting to the shifting landscape of global trade.
In the grand scheme of things, this shift could set a precedent for other automakers facing similar tariff pressures. The focus on local production in the U.S. may become more common as companies look to mitigate the risks of global supply chains and unpredictable tariff policies. Honda’s decision is a clear response to the realities of the trade war, and it may push other manufacturers to rethink their strategies in a world where tariffs, like those imposed by Trump, could drastically alter the cost of doing business.
Sources:
https://www.wsj.com/articles/honda-to-produce-new-civic-in-indiana-2025-03-03/
https://www.cnbc.com/2025/03/03/honda-to-shift-production-of-new-civic-to-indiana.html