8 hours ago - Business

Honda warns U.S.-Canada trade fight may raise prices

Nathan Bomey

Close-up of a person in a dark suit, white shirt, and blue patterned tie, wearing glasses with a lapel microphone, speaking against a clear blue sky. — Honda executive VP Noriya Kaihara, seen here at a press conference in Tokyo earlier this year, says the automaker may need to raise prices in the U.S. if a trade deal doesn't get done with Canada. Photo: Kiyoshi Ota/Bloomberg via Getty Images

The apparent collapse of the conventional trade relationship between the U.S. and Canada could force Honda to raise prices in the U.S., one of the Japanese automaker's top executives warned.

Why it matters: Like most other automakers, Honda relies heavily on the North American supply chain to make the vehicles it sells here.

The automaker had five of the top 10 vehicles on Cars.com's annual American-Made Index this year.

Driving the news: Honda executive VP Noriya Kaihara said at a news roundtable Sunday morning that "we may have to" raise prices if the U.S. can't reach a new trade deal with Canada.

For now, "we are trying to absorb the cost by ourselves or together with our suppliers," Kaihara said at the event tied to the Freedom 250 Grand Prix in Washington, D.C.

Context: His comments come after trade talks between the U.S. and Canada collapsed, prompting an escalating round of tariff announcements from both sides.

Trump on Monday said he would double tariffs on Canadian vehicle tariffs to 50% beginning in 2027.
Honda currently assembles the Civic sedan at a facility in Canada, where it's the second-largest vehicle manufacturer by volume.
Honda said in January that it expects to sell 1.43 million vehicles in the U.S. in 2026.

Kaihara, whose comments came before Trump's auto tariff announcement, made it clear that the automaker's plans to build an eighth assembly plant in North America hang in the balance.

"If there's no USMCA agreement in the future, then we may have to change our direction," he said.

The other side: "President Trump has always been clear: if you don't want to worry about tariffs, make your product in the USA," White House spokesperson Kush Desai said in a statement.

"Domestic and foreign automakers alike, from Ford to Stellantis to Toyota, are investing billions to reshore manufacturing back to America without raising prices for this reason, and other automakers should follow suit," he said.

Zoom in: Honda has already changed direction on its electric vehicle strategy, canceling three U.S. EVs to focus instead on hybrids.

But Kaihara said the company will continue to invest in EV development.
"Whenever the time has come, we will be ready to make new EVs for our customers," he said.

What's next: Honda is currently focused on maintaining momentum with hybrid versions of its vehicles, including the Civic hybrid, which the company can't make enough of, according to American Honda auto sales VP Lance Woelfer.

"There is a strong need for affordable products," Woelfer said.

Editor's note: This story was updated with a statement from the White House.

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Honda warns U.S.-Canada trade fight may raise prices

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