Nissan may relocate operations outside of Mexico over tariff threats

In February 2025, Nissan's CEO announced that the company might be compelled to shift its operations outside of Mexico if the Trump administration imposes a 25% tariff on vehicles produced in the country. This consideration arises as Nissan strives to stay agile and prepared for any potential changes to trade policies. Currently, nearly 670,000 vehicles are produced annually by Nissan in Mexico, with over 456,000 of those exported, primarily to the United States. This movement signifies a significant potential impact on Mexico's robust automotive sector, which relies heavily on manufacturers like Nissan and General Motors. In response to this looming uncertainty, Nissan is actively monitoring the situation and assessing possible relocation sites for its production. Potential options include expansion in locations such as Tennessee and Mississippi, or even increased operations in Asia. This decision is not exclusive to Nissan; it reflects broader concerns among major automotive manufacturers regarding the sustainability of their operations in Mexico amidst escalating tariff threats from the U.S. government. General Motors is also contemplating moving part of its manufacturing operations back to the U.S. due to these pressures, employing over 25,000 individuals across four plants in Mexico. The potential relocation of Nissan's production facilities would have far-reaching consequences for Mexico's economy, particularly in the automotive manufacturing sector, which is a crucial part of the country's export landscape. The significant export of vehicles contributes to Mexico's economic stability, and the loss of a major player like Nissan would further complicate existing challenges in this industry. In recent discussions, Mexican President Claudia Sheinbaum managed to temporarily delay U.S. tariffs with a commitment to send additional troops to the southern border, strategically attempting to combat drug trafficking and reinforce law enforcement cooperatively. Despite this pause, uncertainty looms, and industry executives remain vigilant, weighing the best strategies for the future of their operations in the face of potential tariffs that could fundamentally change the landscape of vehicle production in Mexico.