By Matija Šerić
Donald Trump won his second term last year by presenting his vision of reviving and boosting the American economy under the MAGA (“Make America Great Again”) agenda. He promised to achieve this through tariffs in global trade, energy independence, investment in infrastructure, deregulation, and the revitalization of struggling American industries. A major part of the U.S. industrial base is built on automobile manufacturing.
Big Promises
For this reason, the unconventional president repeatedly announces the great comeback of the American auto industry, which is supposed to shine once again. According to the promises of the ruling elite, new car factories will open in the U.S., some coming from neighboring countries like Mexico and Canada, and others from overseas, such as China and Vietnam. In line with these expectations, Trump and his associates often boast that American cars will sell at lightning speed from Western Europe to the Far East. “We have so many auto factories that are currently under construction or in the planning phase. And they (the factories) are coming from China. They are coming from Mexico,” the president said at a White House event earlier this month. A few days later, he complained about the significant decline in American auto production over the years and triumphantly stated, “The car factories are coming back.”
The Big Three Adapt Their Operations
Despite loud announcements of a new renaissance in the American auto industry, the facts show that there has not been—and will not soon be—a massive establishment of new car factories across the U.S. Instead of constructing entirely new and modern plants, American automakers (the Big Three: General Motors, Ford, and Stellantis North America, formerly Chrysler) are mostly making targeted adjustments to existing factories, attempting to align their operations with the economic vision of the Trump administration. U.S. car manufacturers are focusing on two main factors: high tariffs in foreign trade and government measures that hinder the development of electric vehicles.
Repurposing Existing Factories
To bypass import tariffs, automakers are choosing to repurpose existing, inactive plants in the U.S. and start producing models previously imported, which are currently hit by new—and high—tariffs. For example, Nissan plans to increase production of the Rogue SUV, as well as the Altima and Sentra models, at its U.S. plants in Tennessee and Mississippi, while gradually reducing imports from Japan. Under a temporary agreement with the Trump administration, Japanese vehicles are subject to a 15% tariff. Therefore, it is logical that some production will shift to the U.S. rather than overseas. This approach allows automakers to respond more quickly to changing market conditions and protect the profitability of their U.S. operations.
How Trump’s tariffs are impacting the auto industry
Electric Vehicles Take a Backseat
Meanwhile, many automakers are abandoning earlier commitments to produce electric vehicles (EVs) and are returning to internal combustion engine cars (gasoline and diesel). This is a complete 180-degree turn from the trend of the past four years, during which there was a strong shift toward EV production that spurred significant investment in factories. However, with the change in administration earlier this year, priorities shifted. Most of the recently announced capital investments in U.S. factories are actually the result of withdrawing from environmentally friendly EV projects initiated under the Biden administration.
Profit Trumps Ecology
In June, General Motors announced it would repurpose its plant in a Detroit suburb, replacing EV production with gasoline and diesel vehicles. The transition from electric to internal combustion vehicles can be financially justified. During Trump’s first term (2017–2020), Ford, General Motors, Stellantis North America, and other manufacturers spent $21 billion on production, while between 2021 and 2024 (Biden’s term), expenses totaled $38 billion. The high costs over the past four years were due to EV battery production and purchasing components for electric vehicles. While EVs are expensive, they are far more environmentally friendly than traditional vehicles. However, the current U.S. administration does not acknowledge the phenomenon of climate change and is therefore not particularly concerned about ecology. This gave further reason for the management of major auto corporations to slow down EV production. Even before this, EV demand had been below expectations.
Statistics Show the Reality
Although the White House talks about improvements in American vehicle production, much of it is exaggeration without real basis. According to White House data, the import of cars, engines, and machine parts into the U.S. fell by about 10% in the first quarter of this year, totaling $421.4 billion. Meanwhile, according to Federal Reserve data, U.S. car production increased by 4% this year—but this is below the average of the past decade. The drop in imports occurred due to high tariffs, but significant production growth did not materialize. Moreover, there is no evidence that automakers from Canada, Mexico, or the European Union are relocating their factories to the U.S., as confirmed by David Adams, president of the Canadian Global Automakers Association.
Revitalization of the Auto Industry Is Yet to Come
It is clear that despite grand promises, the revitalization of American auto production has not yet occurred. The Rust Belt, or the Great Lakes region—home to cities like Detroit, Indiana, Toledo, and Chicago—has not experienced significant improvement. America’s industrial hub will still need a proper restart. Whether the current U.S. government can achieve this will depend on various factors. The general state of the American economy, which faces a risk of stagflation, will be crucial. In any case, the revival of the U.S. auto industry will require serious investment in modernizing outdated plants and stimulating domestic demand—not just loud rhetoric and strict tariffs.
References:
https://autovista24.autovistagroup.com/news/record-ev-sales-as-us-new-car-market-growth-continues/
https://www.cnbc.com/2025/09/25/new-car-sales-see-boost-as-consumers-fear-tariffs-higher-prices.html
https://www.cbtnews.com/volvo-to-ramp-up-u-s-production-at-south-carolina-plant-amid-trump-tariffs/
