Honda (HMC.US) will transfer production of the Insight hybrid model to the United States in response to the Trump administration's automobile tariffs.

Honda Motor Co., Ltd. Sponsored ADR (HMC.US) plans to transfer production of its hybrid Civic from Japan to the United States in response to President Trump's tariffs on imported cars. A Honda spokesperson said on Wednesday that production of this five-door hybrid model will move to Honda's factory in Indiana, USA around June or July. The spokesperson stated, "This decision was made based on external factors such as tariffs from the Trump administration." While it is difficult to predict whether, when, and where Trump's tariffs will take effect, Honda is one of the foreign car brands most affected. The United States is the largest market for Honda Motor Co., Ltd. Sponsored ADR. A Honda executive said last November that the company exports about 160,000 cars annually from Mexico to the United States. Mexican Economy Minister Marcelo Ebrard earlier this week said on social media that Honda's executives in Mexico had informed the Mexican government that the company's production plans in the country have not changed. Earlier reports from Japanese media suggested Honda was considering shifting production from Mexico and Canada to the United States to address the automotive tariffs. Christopher Richter, senior analyst at Japan's Lein Securities, said that the tariffs proposed by the Trump administration could lead to a more than 14% increase in passenger car prices in the United States. He stated that Honda's operating profit could decrease by 20%, and other Japanese automakers operating in the U.S. market could also see declines in their profits. For Toyota (TM.US), Subaru, and Mazda, the expected declines are 33%, 56%, and 68% respectively. Trump announced at the end of March that he would impose a 25% tariff on imported cars, which went into effect on April 3. However, Trump recently mentioned that he may temporarily exempt the automotive industry from tariffs, without specifying a timeframe for the suspension.