Tariff Talk: Toyota To Raise Prices On Certain U.S. Models

Toyota and Mazda are among the newsmakers this week when it comes to auto tariffs. Here's a look at the latest headlines:

Toyota To Raise Prices On Certain U.S. Models

Toyota will raise prices on certain U.S. models by an average of $270 starting in July, part of what the automaker describes as a routine adjustment—but the timing is hard to ignore. The increase comes just weeks after President Donald Trump slapped a 25 percent tariff on imported vehicles and parts, a move that’s already sending ripples through the industry. Toyota insists the tariffs aren’t the reason, calling the price bump part of a standard review. Lexus models will also see a jump, averaging $208 more per vehicle. Meanwhile, other automakers are quietly making similar moves. Mitsubishi announced a 2.1 percent hike earlier this week, and Subaru already raised prices on several models last month—some by more than $2,000—citing “market conditions.” Ford, which builds several vehicles in Mexico, bumped up prices in May by as much as $2,000 on three of those models, becoming one of the first to make a direct adjustment after the tariff hit. Publicly, few are blaming tariffs outright. But when price hikes start stacking up right after a sweeping trade penalty, the math tends to speak for itself.

Mazda Motor Corp. Looks To Its Home Market

With U.S. tariffs casting a shadow over its export-heavy business, Mazda Motor Corp. is pivoting to familiar ground — its own. The automaker, which relies on international markets for 90 percent of its global sales, is looking to grow Japanese deliveries by about a third in an effort to blunt the financial sting of a 25 percent import duty imposed by the Trump administration. Mazda expects the tariffs to take a toll on U.S. volume, but the company is far from standing still. Executives have launched a domestic strategy focused on revitalizing Japan sales, where Mazda currently trails Toyota, Suzuki, Honda, Daihatsu and Nissan. The target: 200,000 units annually, up from 150,000. Achieving that means retooling Mazda’s sales network and emphasizing higher-margin crossovers like the CX-60 and CX-80, both built in Japan at the Hofu plant — the same site producing their U.S.-bound siblings, the CX-70 and CX-90. With no end in sight to trade tensions — recent talks between President Trump and Japanese Prime Minister Shigeru Ishiba ended without a deal — Mazda is doubling down on local market strength. Domestic retail operations will undergo a transformation, modeled after the brand’s U.S. overhaul. The focus is on fewer, more productive dealerships in urban areas, with a goal of boosting per-store sales from 250 to 400 vehicles per year. Mazda’s exposure is acute: of the 1.21 million vehicles it built globally last year, roughly two-thirds came from Japan — but only 150,000 stayed there. In 2024, the company exported nearly 236,000 vehicles to the U.S., or 55 percent of its American sales. With limited North American capacity, and Canada now retaliating with tariffs on U.S.-built cars, Mazda even stopped shipping its Alabama-built CX-50 to Canadian dealers to preserve U.S. supply. In the meantime, Mazda is leaning on its Japanese roots not just for volume, but for resilience. With EV production planned at Hofu and a fresh CX-5 coming soon, it’s counting on domestic momentum to counterbalance international headwinds.

New Research Regarding Mexico's Role in the North American Auto Industry

Mexico’s role in the North American auto industry appears unshaken by the latest round of U.S. tariffs, with new research showing the country is likely to remain a cornerstone of vehicle and parts manufacturing. Even with a 25 percent duty on imported vehicles and auto parts from most markets, Mexico retains a competitive edge thanks to low labor costs, regulatory stability, and preferential treatment under the United States-Mexico-Canada Agreement (USMCA). Modeling by consulting firm Roland Berger indicates that the structural advantages Mexico offers — particularly skilled labor availability and proximity to the U.S. — continue to outweigh tariff-driven cost increases. While U.S. trade policy under President Trump seeks to bolster domestic production, many vehicles will still be more cost-effective to produce in Mexico. On average, labor cost per vehicle in Mexico was just $305 last year, compared to $968 in Canada and $1,341 in the U.S., according to Oliver Wyman. Mexico's manufacturing appeal has also matured beyond cheap labor. It now houses a growing number of high-tech engineering centers and automated facilities, thanks to years of investment in education, infrastructure, and technology. Companies increasingly rely on Mexico not just for assembly, but for complex and high-value manufacturing. The country is further benefiting from the broader decoupling of U.S. and Chinese supply chains. As automakers seek alternatives to China, many are turning to Mexico and Southeast Asia. But unlike other global markets, Mexico enjoys favorable USMCA rules that exempt compliant goods from some or all of the new tariffs, preserving its logistical and cost advantages. Despite calls to reindustrialize American manufacturing, suppliers and OEMs continue to see North America as a single, integrated production network. Analysts suggest that any push to relocate production to the U.S. will require meaningful investment incentives — not just protectionist policies — and continued coordination with Mexico will remain essential to the region’s industrial strategy.