Honda is preparing to build its eighth plant in North America. Or maybe not. The Japanese company is indeed considering what to do. It is also considering the idea of abandoning this strategy in case a key trade agreement is not extended. We recall that these days the Trump administration is negotiating with Canada and Mexico on the fate of the free trade agreement known as USMCA. The outcome of these talks could determine the future of the next Honda site in North America.
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Honda reflects on the new site in North America
Reuters reports that Honda’s executive vice president, Noriya Kaihara, told journalists during a roundtable in Washington that the Japanese automaker is close to full production capacity in North America and needs a new plant. “However, if in the future there is no USMCA agreement, we may have to change direction“, the executive said. Adding that the company will have to make a decision within one or two years, and would like the plant to be operational around 2030. Not only that: Kaihara also pointed out that currently the company is not passing on customs duty costs to buyers in North America.
Hyundai also shows uncertainty
Honda is certainly not the only automaker having doubts in this regard. Just last year, Hyundai had announced that uncertainty about the agreement was delaying its investment decisions. “A quick confirmation of the USMCA renewal would immediately unlock over 20 billion dollars of new American investments. Every month of uncertainty slows job creation, site selection, and technological development”, the automaker said in November.
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