Toyota relocates Tacoma production to Texas; Trump takes credit.

      Toyota plans to invest $3.6 billion to expand its San Antonio facility and transition some Tacoma pickup production from Mexico to Texas over the next four years, creating 2,000 jobs. While Trump took credit for this decision due to tariffs, Toyota did not cite tariffs as a reason for the move and confirmed that it is not leaving Mexico. This announcement comes amid uncertainty regarding the USMCA, which was not renewed in its current form on July 1st.

      On Monday, Toyota unveiled its intention to invest $3.6 billion in its San Antonio plant to add a second assembly line and move part of Tacoma production from Mexico. President Donald Trump quickly claimed this as evidence that his trade policy is effective, stating, “That’s what tariffs do, properly used,” during a visit to Ankara, Turkey.

      However, Toyota's narrative differs, as the announcement did not link the expansion to tariffs. North America chief Ted Ogawa emphasized the company's "confidence in the region’s workforce, innovation, and long-term growth potential." Importantly, the company is not leaving Mexico; production will gradually shift from its Baja California plant over approximately four years, while Toyota will continue to manufacture Tacomas in Guanajuato and Corollas in Mexico.

      The expansion will create around 2,000 jobs and add 2.5 million square feet, effectively doubling the size of the Texas location by 2030 and increasing annual capacity by 150,000 vehicles. Since 2003, Toyota's total investment in San Antonio will reach $8.3 billion.

      Trump's portrayal overlooks a critical detail: in the year ending March 2026, Toyota's North American division reported an operating loss, with US tariffs costing about $9 billion in operating income. Reshoring production is one way to address this issue, but other options include raising prices or absorbing losses. Automakers are reevaluating strategies, with numerous electric vehicle models being removed from the US market as tariffs and the loss of tax credits alter the financial landscape.

      The policy environment is indeed unstable. On July 1, the US chose not to renew the USMCA in its current state, opting for annual reviews and pushing for the requirement that 50% of automotive value be produced within America. Toyota acknowledged this uncertainty, calling for a "quick resolution" to the USMCA while reaffirming its commitment to all three North American nations, indicating a cautious approach rather than celebrating.

      For Trump, the situation appears positive regardless of Toyota's perspective, as a well-known brand is adding US factory jobs during his administration, which has argued that tariffs and the evolving US market are prompting automakers to produce domestically. Meanwhile, Toyota is gaining real momentum in the US, nearing GM as hybrid sales rise while competitors’ electric vehicle sales decline, making it a logical business decision to expand where their trucks are selling well.

      Both interpretations hold validity: tariffs are increasing Mexican production costs, while Texas presents a growing market and workforce. The main difference lies in who gets to take the credit, and the impact of the cross-border situation extends beyond Toyota, affecting Tesla's own sourcing adjustments due to tariffs.