TOKYO, Japan—According to Reuters and the New York Post, Honda has decided to manufacture its next-generation Civic hybrid in Indiana instead of Mexico to avoid potential U.S. tariffs. Initially, Honda planned to produce the Civic in Guanajuato, Mexico, starting in November 2027, but rising costs and the threat of 25% tariffs under Trump's proposed policies prompted the company to shift production to Indiana in May 2028, with an expected annual output of 210,000 vehicles.

This decision highlights how automakers are adapting to U.S. trade policies, making Honda the first major Japanese carmaker to take concrete action. While Honda has not publicly commented on the change, the company acknowledged that it continually evaluates production plans based on market conditions.

Honda sends around 80% of its Mexican output to the U.S., and about 40% of the vehicles it sells in America are imported from Mexico and Canada. The shift to Indiana could mitigate tariff risks, but if U.S. neighbors impose retaliatory tariffs, Honda may still face cost increases.