US President Donald Trump seized on Toyota‘s decision to move Tacoma pickup truck production from Mexico to Texas, calling it proof that his trade policies are reshaping the auto industry.
“Toyota is moving from Mexico to the United States (Texas!). A really big deal. Tariffs at work!” the President posted on Truth Social on Tuesday.
The Japanese automaker announced on Monday a $3.6 billion expansion of its San Antonio manufacturing campus.
A White House spokesperson added that the investment was one of many driven by the administration’s agenda of tariffs, deregulation and tax cuts, according to Reuters.
Total investment at the San Antonio site will reach $8.3 billion since Toyota broke ground there in 2003.
Reversing 2020 Plans
The move reverses a decision Toyota made in 2020, when the automaker shifted Tacoma assembly from San Antonio to two plants in Mexico — one in Baja California, operating since 2004, and a newer facility in Guanajuato.
Under the current tariff regime, vehicles assembled in Mexico face US duties of up to 25% on the value of non-US parts, a cost structure that has eroded margins on one of Toyota‘s highest-volume nameplates.
The Tacoma is the best-selling midsize pickup in the United States, with 274,638 units delivered last year alone.
$9.1 Billion Tariff Burden
Toyota faces the steepest tariff bill of any single automaker globally.
The company projects roughly $9.1 billion in tariff-related costs for its current fiscal year, and its North American division swung to an operating loss in the fiscal year ended March 31, 2026.
US duties stripped approximately 1.38 trillion yen ($9 billion) from operating income.
The San Antonio expansion — internally called Project Orca and first filed with Texas authorities in May — will add a 2.5-million-square-foot building to the existing campus, doubling the plant’s footprint to approximately five million square feet.
Toyota‘s board in Japan approved the project on July 1.
The new line will add roughly 150,000 units of annual capacity to the existing 200,000-vehicle operation, which currently assembles the Tundra full-size pickup and Sequoia SUV.
Additionally, the investment will create 2,000 new jobs, bringing Toyota Texas’s workforce to approximately 6,000, supported by 23 on-site suppliers.
Toyota Motor North America President and CEO Ted Ogawa framed the expansion as a “continued investment in North America” and the deepening of their “commitment to American manufacturing, creating meaningful and sustainable jobs.”
The transition from Baja California is expected to take approximately four years, with the new line fully operational by 2030.
The Guanajuato plant will continue building Tacomas, though their export destination remains unclear.
According to autoevolution, those units will no longer be shipped to the United States once the Texas line is running.
A Pattern Across the Industry
Toyota is not the only automaker relocating production to the United States in response to tariff pressure.
Stellantis announced last October that it would move Jeep Compass production from its Brampton, Ontario plant to Belvidere, Illinois, as part of a $13 billion US investment plan — the largest in the company’s 100-year American history.
The Brampton facility had been undergoing retooling when Stellantis paused work earlier that year amid US tariffs.
General Motors followed a similar trajectory.
This January, GM eliminated approximately 500 jobs at its Oshawa, Ontario assembly plant, dropping from three shifts to two and transferring full-size truck production to its Fort Wayne, Indiana facility.
The Detroit automaker characterized the move as ending a temporary post-pandemic capacity measure, but the production shift to the US was undeniable.
Both moves triggered retaliatory quota reductions from Ottawa under its United States Surtax Remission Order, a framework that ties tariff-free import volumes to domestic production commitments.
Canada’s Finance Minister François-Philippe Champagne called the automakers’ decisions unacceptable violations of their legal obligations to the country.
USMCA Uncertainty
The Toyota announcement landed days after the United States formally declined to renew the USMCA trade agreement for another 16-year term at the July 1 review deadline.
Trade Representative Jamieson Greer stated that Washington did not agree to renew the pact in its current form, triggering annual reviews that will continue until the deal either gets extended or expires in July 2036.
The agreement remains in force and current tariff preferences are unaffected for now. Canada and Mexico both signalled willingness to extend, but the US pushed for separate bilateral negotiations — a structure both neighbours have publicly rejected.
The next round of US-Mexico talks is scheduled for the week of July 20 in Mexico City. Canada has not yet begun substantive text-based negotiations with Washington.
The decision not to renew added a layer of long-term uncertainty to an industry already recalibrating supply chains.
Last November, major automakers including Tesla, Toyota, Ford, GM, Honda, Hyundai, Rivian, and Stellantis filed comments with the US Trade Representative’s Office urging the administration to extend the deal.
Hyundai warned at the time that uncertainty over USMCA was delaying investment decisions and that early confirmation of the agreement’s extension would unlock over $20 billion in new American investments, Reuters reported.
Toyota itself urged a quick resolution in its San Antonio announcement, stating that it remains committed to operations across the US, Canada, and Mexico and encouraging a swift outcome on the trade agreement to keep the North American region globally competitive.
Mexico Absorbs the Hit
The tariff-driven production shifts are also reshaping operations for automakers that remain in Mexico.
Nissan CEO Iván Espinosa said the company is cutting production costs for vehicles manufactured in Mexico to offset the impact of the 25% duty on models including the Sentra and Kicks.
According to Nissan, tariffs add between $2,500 and $3,000 per vehicle exported to the United States.
Vehicles built in Mexico accounted for more than a third of Nissan‘s US sales last year.
Nissan recently closed its CIVAC assembly plant in Jiutepec, Morelos, consolidating output in Aguascalientes under its Re:Nissan restructuring program.
The plan includes reducing global production capacity from 3.5 million to 2.5 million vehicles annually, closing seven of 17 assembly plants worldwide, and cutting roughly 20,000 jobs.
Tariffs vs Long-Term Strategy
Toyota has framed each of its recent US investments — including a $1 billion commitment to plants in Kentucky and Indiana announced in March, and $912 million across five additional states — as part of a long-running philosophy of building where it sells, regardless of the political environment.
Texas Governor Greg Abbott said the investment qualifies for a $20 million state grant and incentives through the Texas Enterprise Fund and the Jobs, Energy, Technology and Innovation (JETI) program.
The state has positioned itself as a manufacturing hub — Toyota‘s San Antonio campus has assembled more than 197,000 vehicles per year and will now add one of the company’s most commercially important nameplates to its output.
At the same time, the Japanese automaker’s $10 billion US spending pledge — made in November 2025 — now has a concrete flagship project attached to it.
