Hyundai Shifts Tucson Production to the US to Avoid Trump Tariffs

In response to growing protectionist measures led by US President Donald Trump, Hyundai Motor has announced the relocation of a portion of its Tucson SUV production from its plant in Pesqueria, Nuevo Leon, to the United States. The move aims to avoid the 25% tariffs imposed on foreign-made vehicles and auto parts, which took effect on April 3.

“Due to the global geopolitical, trade, and economic environment, Hyundai has decided to redirect production of the Tucson model to markets with which Mexico maintains free trade agreements,” the company tells EL PAÍS.

While the shift represents only a small production volume — just 16,000 units were assembled in Mexico last year — it is part of Hyundai’s broader strategy to deepen its US presence. In March, the company announced a US$21 billion investment in its US operations through 2028. This includes expanding its new Georgia facility and increasing capacity at its Alabama plant, with the goal of creating 14,000 direct jobs.

A Tariff Shockwave Across the Auto Industry

The move follows a sweeping set of tariffs introduced by Trump in March. After initial consultations with executives from Ford, GM, and Stellantis, the administration granted a short-lived exemption for US automakers before launching a full-scale tariff plan. Beginning April 3, a 25% tariff was imposed on fully assembled imported vehicles, with auto parts to follow by May 3.

On April 2, Trump introduced a broader “reciprocal tariff” regime that included a baseline 10% tax on all imports, and even higher rates for key trade partners: 34% on China, 25% on South Korea, 20% on the European Union, and more. USMCA-compliant imports from Canada and Mexico were spared, but non-compliant goods faced a 12% tariff if they met specific conditions, as previously reported by MBN.

The aggressive trade policies are already reshaping global automotive forecasts. According to S&P Global, the North American light vehicle production outlook has been cut significantly — down by 944,000 units in 2025 and 778,000 in 2026. The forecast for 2027 remains flat at 15.47 million units, suggesting that some manufacturers, such as Nissan, BMW, and Honda, could benefit from increased onshoring.

South America has also seen downward revisions, with production cuts of 28,000 units for 2025 and 34,000 for 2026. While the direct impact of tariffs is limited in the region, broader supply chain disruptions and weakened demand are affecting long-term forecasts. 

While automakers such as Ford and Stellantis are rolling out aggressive discount campaigns to clear inventory ahead of rising costs, Hyundai has chosen a different path. The company has committed to freezing sticker prices on all current models, including its Genesis luxury line, through June 2. “We know consumers are uncertain about potential price increases, and we want to provide some stability over the next couple of months,” says José Muñoz, President and CEO, Hyundai, as MBN reported.

Inventory levels remain stable for now, with Hyundai dealerships carrying about 60 days’ worth of supply as of early April. Ford and Jeep had around 64 days, Ram had 70, Nissan held 42, and Chrysler 15 days.