Nissan is sounding the alarm: new tariffs on Mexican-built vehicles could make some of its most affordable models significantly more expensive for American buyers. The automaker warns that shifting production back to the US would drive up costs, with those increases likely passed onto consumers.
The Cost of “Made in America”
Currently, Nissan relies on Mexico to produce popular, budget-friendly cars like the Sentra (starting at $22,600) and the Kicks (beginning at $22,430). Lower labor costs in Mexico keep these models within reach for many buyers. However, tariffs could add roughly $2,500 to $3,000 per vehicle. Last year, cars assembled in Mexico accounted for over a third of Nissan’s sales in the US.
The situation underscores a growing trend: the tension between political pressure for domestic manufacturing and the economic reality of affordable car production. Previously, Nissan also built the Versa in Mexico – the last new car sold in the US for under $20,000. While average new car prices have dipped slightly to $49,353, these entry-level models are becoming increasingly rare.
The Margin Problem
Nissan Americas chairman Christian Meunier made it clear at the New York Automotive Forum: “We couldn’t build these entry-level cars in the US at the same cost, we couldn’t do it. The problem is the margin.” This isn’t just about Nissan; it’s about the broader viability of low-cost vehicles in a high-wage environment.
What Happens Next?
Nissan is actively lobbying lawmakers to ease tariffs, and early signals suggest some openness to the idea. However, the future hinges on the US-Mexico-Canada Agreement (USMCA). The deal is up for review in July, with a potential 16-year extension on the table.
The coming months will be crucial. If tariffs remain or increase, affordable cars could become a luxury for many American consumers. The USMCA negotiations will determine whether the promise of “Made in America” comes at the expense of accessibility.
