Toyota Is Moving Some Truck Building to the US — But Most Car Companies Aren’t (And Here’s Why, Explained Simply)

What Did Toyota Announce?

Toyota, a big car company from Japan, said something surprising last week: they will move some of the making of their popular Tacoma pickup trucks from Mexico to the United States.

• They will build half of these Tacomas at a bigger factory in San Antonio, Texas.
• That factory already makes bigger trucks (Tundra) and a large SUV (Sequoia).
• They will still keep making Tacomas in Mexico too.

Why Did President Trump Cheer?

President Donald Trump praised this move. He said it was "a really big deal" and claimed it shows "Tariffs at work!"

What is a tariff? A tariff is like an extra tax you pay when you bring a product from another country into your own. The idea is to make foreign things cost more so people buy local stuff instead.

But Toyota Says "It’s Not Because of Tariffs"

Toyota did not say the tariff tax is the reason they moved.

They told CNN:

"While we are impacted by evolving trade policies, our investments are multi-decade decisions based on broader strategic goals."

In plain words: Building factories is a choice you live with for 20+ years, so they think about big long-term plans, not just today’s taxes.

Important: More than a year after the Trump team announced big car tariffs to encourage new US factories, Toyota’s move is the exception, not the usual thing.

Most Car Makers Are Staying Put

Very few car companies have said they will move production to the United States.

• Most would rather pay the tariff tax than spend billions of dollars to build brand-new factories.
• The few vehicles that are coming to the US are just going into factories that already exist.

How Many Cars Are Imported Anyway?

Even with tariffs, a lot of cars driven in the US come from elsewhere:

• Last year, 46% of cars bought by US shoppers were imported (from other countries), according to Mobility Global.
• That’s only a tiny drop from 47.7% in 2024.
• Part of that small drop happened because companies stopped selling some cheap imported cars, like the Nissan Versa.

Why Not Just Build New Factories?

Experts say there are too many costs and too much uncertainty.

Ivan Drury, a car-buying expert at Edmunds, said:

"It’s a huge commitment (to build a factory) and to do it on a whim would be borderline crazy. So the safest action is no action. Continue on, even with that increased (tariff) cost."

Think of it like this: Building a giant toy factory takes years and tons of money. If the rules might change next year, you don’t want to risk it.

A Trade Deal Called USMCA Is in Trouble

One way car companies keep costs low is a deal called the US-Mexico-Canada Agreement (USMCA). It’s a friendship treaty from Trump’s first term that lets parts cross borders easily.

• This deal is now being re-negotiated.
• Trump said he might quit the deal if it doesn’t give more goodies to American companies.
• This scares car makers because they rely on parts moving freely. For example, a small remote car key is assembled in Mexico but crosses borders in North America several times before being finished—just like countless other auto parts.

Important: A group representing General Motors, Ford, and Stellantis (the American Automakers Policy Council) said they need a "swift and durable resolution that ensures a level playing field and provides long-term certainty needed for capital-intensive automotive investments."

Tariffs Hurt Profits But Haven’t Changed Much

The tariff tax is biting into company piggy banks:

• Toyota paid $8.4 billion in duties (tariff taxes) in its most recent fiscal year, turning its North American business from making money to losing money.
• General Motors paid $3.1 billion in tariffs in 2025.
• Ford paid $1 billion.

But that doesn’t mean tariffs did nothing:

• Along with the Toyota Tacoma, GM said it would move building of two SUVs from Mexico to the US.
• GM will also stop bringing a Buick SUV from China and build a replacement in the US.

These Moves Use Old Factories, Not New Ones

The GM vehicles will go to existing plants in Kansas and Tennessee. Those places had empty space because GM cut back on massive investment into electric-vehicle (EV) production after Trump and Republicans in Congress ended government support for EVs.

Toyota’s Own Good Business Reason

A Michigan economist (Patrick Anderson) says Toyota has another reason beyond trade policy:

• Toyota is really good at selling trucks in the US.
• Their San Antonio factory is already the heart of that US truck making.
• So, putting more Tacoma work there is like putting all your toys in one organized box — it just makes natural business sense to consolidate existing operations.

Why Waiting Is Smarter Than Building

Even with high tariffs, shifting production based on today’s rules is risky because:

1. Trade policies can change faster than you can build a factory.
2. Experts say it would take years and billions to build enough new or expanded US plants to replace imported vehicles.
3. A future president could easily reverse Trump’s policies.
4. Workers in the US cost more money than in Mexico and some other places.
5. People still really want cars: total sales went up 2% last year even though cars cost record-high prices, so companies keep importing to meet demand.

Callout: Despite paying billions in tariffs, car companies (like in the photo of Los Angeles port filled with imported cars) keep bringing vehicles from outside rather than shutting foreign production and building new US factories.

Summary

Toyota is moving half of its Tacoma truck production from Mexico to Texas, but it says this is a long-term business choice, not a reaction to tariffs. Most other car makers are not following because building new factories is too costly and uncertain, and the rules could change. A key trade deal (USMCA) is up for renegotiation, adding fear. Tariffs have cost companies billions, yet only a few vehicle lines are shifting to existing US plants. Strong car demand keeps imports flowing.

FAQ

Q1: What is a tariff, in kid words?
A: It’s an extra fee you pay when you bring something from another country into your home country. It makes foreign toys (or cars) more expensive.

Q2: Why don’t car companies just build all their cars in the US to avoid tariffs?
A: Building a car factory costs billions and takes years. If the tariff rule changes tomorrow, they’d be stuck with an expensive factory. Also, US workers cost more, and they already have factories elsewhere.

Q3: What is the USMCA?
A: It’s an agreement between the US, Mexico, and Canada that lets car parts move between those countries without extra taxes. It’s like shared playground rules so everyone can build together cheaply.

Q4: Did Toyota move because of Trump’s tariffs?
A: Toyota says no. They say they plan decades ahead for big reasons like growing their truck business, not just because of current taxes.

Q5: Are any cars actually moving production to the US?
A: Yes, a few: Toyota Tacoma half-production to Texas, and some GM SUVs from Mexico and China to existing US plants in Kansas and Tennessee. But these are exceptions, not a flood.