Japanese Automakers Lobby to Safeguard USMCA Production Network

Japanese automotive manufacturers are positioning themselves ahead of the 2026 review of the United States-Mexico-Canada Agreement (USMCA), aiming to safeguard the US$87 billion they have invested in North America and the integrated production network linking the three countries. In coordinated submissions to the Office of the United States Trade Representative (USTR), industry groups emphasized that the agreement remains critical for investment planning, supply chain stability, and vehicle affordability in the region.

The Japan Automobile Manufacturers Association (JAMA), representing 14 brands including Toyota, Honda, Nissan, Mazda, Mitsubishi, Subaru, Suzuki, Isuzu, Hino, Daihatsu, Yamaha, and Kawasaki, highlighted that the current trade framework underpins its long-term model of producing vehicles near principal markets. “The agreement enables our members to plan for production growth by leveraging efficiencies created through North American interconnectedness,” JAMA stated, noting that uncertainty would affect competitiveness.

JAMA outlined its regional manufacturing footprint: 25 plants in the United States, 12 in Mexico, and five in Canada, covering vehicle assembly, engines, transmissions, parts, and batteries. The association emphasized that the system is designed to reinforce—not displace—US production, stating that “North American integration supports US manufacturing and exports,” pointing to roughly US$66 billion in US investments alone.

Cross-border supply chains are vital: engines built in Ohio move to Guanajuato and Ontario, while transmissions and components produced in Mexico and Canada supply US assembly lines. JAMA noted that “approximately 75% of what Japanese-brand automakers sell in the United States is manufactured in North America,” with half of those vehicles built in the United States.

Electrification projects also depend on predictable trade rules. Toyota recently opened a battery plant in North Carolina, Honda is advancing a joint venture with LG Energy Solution in Ohio, and Isuzu is constructing a truck plant in South Carolina. JAMA argued that continuity of USMCA is essential to support these investments and maintain North America as a competitive global platform.

Vehicle retailers echoed these concerns. The American International Automobile Dealers Association (AIADA) told the USTR that integration with Mexico and Canada is crucial to stabilizing prices. AIADA warned that “strengthening regional manufacturing is necessary to avoid further price spikes,” amid declining affordability.

AIADA data show that the average price of a new vehicle in the United States surpassed US$50,000 in September 2025, with average monthly payments near US$800. The Center for Automotive Research projects that current tariffs could add US$4,600 per vehicle by 2027, potentially reducing sales by 3.9 million units over three years. AIADA cautioned that the impact “will not only affect manufacturing plants but also dealerships, where declining sales reduce hiring and community engagement.”