Japan, Korea Put Auto Investment on Hold Waiting for USMCA Deal

[ABS News Service/28.08.2026]

A senior Honda executive said the Japanese automaker might not build an eighth assembly plant in North America unless a key trade deal is extended, Reuters news service reported.

The Trump administration is currently negotiating with Canada and Mexico over the fate of the free trade deal known as USMCA.

Honda Executive Vice President Noriya Kaihara told reporters at a roundtable in Washington the automaker is close to full production capacity in North America and needs a new factory.

However, “if there is no USMCA agreement in the future, we may have to change our direction,” Kaihara said, adding the company will need to make a decision within a year or two and would like the plant to be running by around 2030.

He said currently Honda is not passing on the costs of tariffs to buyers in North America. The US imposed 50 percent tariffs on $20 billion of Canadian products on Saturday, and Canada said it was retaliating effective September 8.

Last year, Hyundai Motor told the administration that uncertainty about USMCA was delaying its investment decisions.