Korean, Japanese automakers to shift production to U.S. as MAGA takes hold

As U.S. President Donald Trump ramps up his “Make America Great Again” (MAGA) policy, Korean and Japanese automakers are swiftly restructuring their production operations.

To avoid tariff burdens, Japanese carmakers such as Toyota and Honda will begin reimporting vehicles produced in the United States starting next year. Hyundai Motor Group, meanwhile, plans to significantly increase its production share in the U.S. market.

Toyota recently decided to reimport three models built in the United States — the Camry midsize sedan, the Tundra pickup truck and the Highlander sport utility vehicle — beginning next year.

Although the Camry has long held the top spot in midsize sedan sales in the United States, Toyota discontinued sales of the model in Japan in 2023 due to weak domestic demand, which has shifted toward smaller cars and SUVs.

Toyota’s decision to resume sales of the Camry through reimporting comes two years after halting its domestic sales and is seen as an effort to improve trade relations with the United States. Trump has repeatedly expressed dissatisfaction with Japan’s trade surplus with the United States.

Toyota Chairman Akio Toyoda announced a $10 billion investment plan in the United States last month and appeared at a car event wearing a red MAGA hat, signaling his continued outreach to the United States.

Honda and Nissan are also reportedly considering reimporting U.S.-built models. Honda may bring in its Ridgeline pickup truck, Passport SUV and some Acura-branded electric vehicle models, according to Japanese business daily Nikkei. Nissan is weighing reimports of its Altima midsize sedan, Murano SUV and Pathfinder SUV.

For Korean carmakers, reimporting U.S.-made vehicles is less viable due to high labor costs, added logistics expenses and unfavorable currency exchange rates. Instead, they are focusing on ramping up production within the United States.

Hyundai Motor Group aims to increase the local production share of vehicles sold in the U.S. market from the current 43 percent to 80 percent by 2030. It also plans to boost annual North American sales from 834,000 vehicles last year to 1.44 million by the end of the decade.

In a recent interview with Automotive News, Hyundai COO Jose Muñoz said that the company’s goal is not only to raise local production to 80 percent but also to increase the share of local suppliers from 60 percent to 80 percent, outlining plans to target the midsize pickup truck, SUV and commercial vehicle segments — including electric vans and medium-duty trucks.

Industry experts see Trump’s MAGA policy as a catalyst for a shift in global production strategies within the automotive sector.

“We may continue to see a structure where surplus inventory is reimported based on sales in the United States, the largest market. It shows a trend where production is no longer centered on the home country but instead on the largest market — a trend that is likely to strengthen,” said Lee Ho-geun, a professor of future automotive studies at Daedeok University.

The key variable will be profitability, as labor costs in the United States are expected to be a significant factor. Base wages start at $36 per hour, with skilled workers earning more than $43 per hour, according to contracts between the United Auto Workers union and the Big Three automakers — Ford Motor, GM and Stellantis.

These companies also agreed in 2023 to raise wages by 25 percent over five years.

“Labor costs in the United States are high, but the work environment is more stable compared to Korea, which faces uncertainties such as strikes,” Prof. Lee said. “Even if the administration changes, the pressure for local production will remain unchanged.”

BY NAM YOON-SEO, KO SUK-HYUN [lim.jeongwon@joongang.co.kr]