A Partial Win for Carmakers
Donald Trump, the US president, has described a dramatic revival in American carmaking driven by hardline trade measures, yet analysts see the overall effect as neither wholly good nor wholly bad. Since he took office again, General Motors, Toyota, Ford and other manufacturers have unveiled moves to grow their US facilities or relocate output from abroad to fill plants running below capacity, while coping with policies including a 25 percent tariff on imported vehicles. Still, with Republican allies eyeing November midterms, the improvement in the US carmaker picture appears gradual rather than transformative, and in some cases comes alongside reduced spending caused by trade uncertainty.[S1][S2]
According to auto industry specialists, the unpredictable character of Trump's trade policy is holding back larger gains. That shortcoming showed up most recently in the dispute between Washington and Ottawa that has thrown doubt over the future of the North American trade pact, the USMCA. A senior Honda executive said in August that the company was running close to full capacity across its North American plants and was interested in adding a new factory, though it could change course should the uncertainty surrounding USMCA continue.[S1]
Suppliers Under Pressure
Beyond that, the turmoil caused by tariffs and by Trump's rollback of US policies that had favored electric vehicles has hurt the American auto supplier industry, which supplies parts and technology and provides work for roughly 930,000 people in the US. Tyler Harp, an economist at the Center for Automotive Research (CAR), said supplier investment has slowed markedly because of policy uncertainty, tariffs included. CAR figures show supplier investment dropping from over $8 billion in the first quarter of 2025 to roughly $600 million across the following two quarters, before a partial rebound.[S1]
Harp explained that suppliers face greater tariff exposure and are less able than automakers to soak up those costs. Surveys by MEMA, the Vehicle Suppliers Association, show suppliers naming shifts in government trade policy as the sector's biggest threat over the coming year. In the latest report, close to 80 percent of companies placed trade policy changes among their four leading threats, together with a weak US economy, an external or black swan event, and sluggish vehicle sales. A Deloitte commentary accompanying the survey said the industry has recouped only about half of tariff-policy-related costs, a persistent margin strain likely to pressure supplier finances, while following a discipline-over-growth approach and directing more investment toward automation and robotics.[S1]
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Employment and Production Outlook
US auto employment declined through much of 2025 but has mostly climbed during 2026. The sector counted slightly fewer than 1.8 million workers in September, per the US Bureau of Labor Statistics. That figure is nearly one percent above the January 2025 level, when Trump took office, yet over two percent under the prior decade's high point reached in July 2024 under Joe Biden, the BLS data show. American auto output has likewise held broadly steady, with growth not anticipated before roughly 2030, when GM's $4 billion outlays in Michigan, Kansas and Tennessee take effect and Toyota's $3.6 billion plan shifts Tacoma pickup manufacturing to Texas from Mexico.[S1]
Brinley said Global Mobility forecasts US car output at 10 million vehicles in 2026, roughly matching last year, then climbing to about 11.3 million by 2030. She noted that an increase is clearly present and is partly tied to tariffs, since automakers in some instances are reworking plants or drawing on capacity that had gone unused. A completely new factory, like the one Honda has discussed, would need to operate for decades. Brinley said plants are not built with the idea that they will only last one presidential term. Tariffs matter, she added, but they are not the sole factor.[S1]
