On August 25, 2026, Honda made the construction of its eighth assembly plant in North America contingent on a six-year extension of the USMCA, the trade agreement among Mexico, the United States, and Canada. Executive Vice President Noriya Kaihara issued the warning at a press roundtable in Washington, as reported by El CEO.
The agreement is currently undergoing its trilateral review, and the U.S. administration has opted for annual reviews since July rather than the six-year extension the agreement contemplates. Honda's warning comes as the automotive sector faces a 25% tariff on fully assembled vehicles, a cost the automaker has absorbed rather than pass on to North American consumers. For Mexico, the signal matters because the country is one of the region's automotive assembly hubs, and the outcome of the review conditions investment decisions across the entire sector. Forbes México reported that this reading is not unique to Honda: Hyundai linked early confirmation of an extension to more than $20 billion in new regional investments.
The decision on the plant has concrete timelines: Honda must make it within one to two years and expects the facility to be operational by 2030. "If there is no USMCA agreement in the future, we may have to change course," Kaihara said. The trade uncertainty compounds an adjustment to Honda's electric vehicle strategy: in May, the company eliminated its target for electric vehicles to represent one-fifth of its new car sales in 2030, indefinitely suspended its EV and battery project in Canada (an $11 billion plan), and cancelled three electric models intended for the U.S. market.
The decision window is on the table: Honda said it needs to make the call within one to two years, and the USMCA review calendar remains open. That window will signal how North American automotive assembly realigns, with Mexico as part of that production chain.
This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.