Toyota has emerged as the latest automaker to rethink its production plans to avoid President Trump’s harsh tariffs, according to a report.
The Japanese company is weighing whether to produce the next version of its top-selling RAV4 SUV at its Kentucky factory, in addition to manufacturing in Canada and Japan, sources familiar with the matter told Reuters.
Toyota had originally planned to scrap Kentucky production of the RAV4 and solely export the new model to the US from Canada and Japan, sources said.
Toyota told The Post it would not comment on speculation.
“We continually study ways to improve our manufacturing efficiencies to best serve our customers and provide stable employment for our team members,” the company said in a statement.
Toyota’s RAV4 was the best-selling vehicle in the US last year, according to market research firm JATO Dynamics. It stole the crown from Ford’s F-150 truck, which reigned in the top spot for years.
The Japanese automakers sold more than 475,000 RAV4s in the US last year, or about a fifth of its total US vehicle sales.
Toyota is set to unveil its 2026 RAV4 later this year and gradually introduce it in different global markets, though the exact timing is unknown, a source told Reuters. The 2026 model will be the first major redesign since the 2019 SUV.
The final production plans have not been made, according to the report. Toyota, like many other automakers, is not able to shift manufacturing on a moment’s notice.
If Toyota follows through with its plans for the Kentucky plant, it would likely start production of the RAV4 there in 2027, a source told Reuters.
Most vehicles are made along particularly complex supply chains, with auto parts often making multiple border crossings before the finished product is ready for sale.
Foreign vehicle imports currently face a stiff 25% tariff from Trump, which is expected to expand to include auto parts next month.
Japan, meanwhile, has been slapped with a 10% import tax, along with many other nations, for a 90-day pause from Trump’s original “reciprocal” rates as the White House holds negotiations. Trump initially threatened a 24% rate on Japan.
Several major car companies have halted production plans, discussed manufacturing in the US and held off on imports as they attempt to avoid the stiff taxes, which could send costs soaring for producers and hike vehicle prices for US customers.
Volkswagen’s luxury brand Audi has held all vehicle imports that arrived after April 3 – when the auto tariffs took effect – at US ports, ordering dealerships to focus on selling their current inventory.
General Motors and Nissan both announced plans to boost production at their US plants, while Stellantis, which owns Jeep, Ram and Dodge, and Ford rolled out discounts to sway tariff-wary customers.
The threat of higher prices has led to panic-buying, with US shoppers rushing to dealerships across the country in the weeks before the tariffs start to hammer prices.
The supply of new and used vehicles filling US lots dwindled rapidly in March as a result.
Earlier this week, Trump signaled he’s considering a temporary pause on the auto tariffs “to help some of the car companies with it.”
He explained that automakers need time to shift their production out of Canada, Mexico and other nations.
“And they need a little bit of time because they’re going to make them here, but they need a little bit of time. So I’m talking about things like that.”
On Wednesday, the president, along with Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, met with top Japanese officials to discuss the trade tensions.
In a social media post following the meeting, Trump wrote: “A Great Honor to have just met with the Japanese Delegation on Trade. Big Progress!”
With Post wires
Credit: Source link
