Honda Says It May Skip a New North America Plant If USMCA Falls Through

Honda is running out of room in North America. The Japanese automaker is close to full production capacity across its existing plants, and Executive Vice President Noriya Kaihara told reporters in Washington that a decision on an eighth assembly plant needs to come within the next year or two if the facility is to be running by around 2030.

But there is a catch: Honda wants the United States-Mexico-Canada Agreement extended before it commits the capital.

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USMCA is the condition

"If there is no USMCA agreement in the future, we may have to change our direction," Kaihara said at a roundtable with reporters. The Trump administration is currently negotiating with Canada and Mexico over the fate of the free trade deal, and the talks have grown tense. Canada and the U.S. imposed 50 percent tariffs on each other's goods this weekend, with Canada's retaliatory measures set to take effect on September 8.

Honda currently operates seven assembly plants in North America, including facilities in Alliston, Ont., that build the CR-V and Civic. The company has not said where a new plant would go, but an eighth facility would likely produce EVs or hybrids — the segments where Honda is farthest behind its rivals.

Why this matters for Canadian buyers

A delayed or cancelled Honda plant expansion would not change what is on dealer lots tomorrow, but it would reshape the competitive landscape for Canadian EV buyers over the next five years. Honda has pledged to launch 30 electric models globally by 2030 and to make EVs and fuel-cell vehicles 40 percent of its sales by that same date. Without a new North American assembly plant, the company would have to import more of those models from Japan or China — exposing them to tariffs and pushing up prices in Canada.

Kaihara said Honda is not currently passing tariff costs on to North American buyers, but that posture depends on the trade environment staying stable. The 50 percent tariffs the U.S. imposed on $20 billion of Canadian products this weekend, and Canada's planned retaliation, make that stability fragile.

The broader context is that the Canadian auto sector is already under pressure. Ford Oakville's retooling for EVs has stalled, GM is restructuring its dealership network, and Stellantis is shifting production south. A Honda decision to sit out a new North American plant would reinforce the message that trade uncertainty is a bigger threat to Canadian auto manufacturing than any single model launch.

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