by Nissan urges Trump administration to soften tariffs on cars from Mexico
The automaker believes a rate of 10-15 percent is acceptable, while 25 percent is not. Additional costs are putting pressure on the pricing and profitability of key models.
The economics of affordable models remain unchanged
Despite political pressure to return production to the USA, the economics of producing affordable cars remain unchanged. Nissan has once again emphasized that there is no viable way to produce the Sentra and Kicks models in the USA instead of Mexico, even considering the current 25 percent import tariff. Although the company would certainly like to avoid these additional costs, the numbers are not in its favor.
Research on moving production
According to Nissan CEO Ivan Espinosa, the automaker studied the possibility of moving production to the USA, but the conclusion remained the same. Relocating assembly lines to the USA would raise prices above the level that buyers in this segment are willing to tolerate, effectively undermining the core appeal of these cars.
These two products are supplied from Mexico due to segment affordability requirements. At the moment, moving them to the USA is not possible. We need to continue working on cost competitiveness.
This is a problem Nissan cannot afford. The Sentra and Kicks are not niche players but form a central part of the brand’s volume strategy in the USA, accounting for over 25 percent of total sales in 2025.
The real cost of tariffs
Prices for the latest Sentra start at a competitive $22,600, while the compact crossover Kicks is available from $22,430. Nissan recently stated that tariffs on cars produced in Mexico add $2,500 to $3,000 per car and called them “unfair,” especially considering that tariffs on cars from South Korea and Europe are currently 15 percent.
According to Nissan Americas Chairman Christian Meunier, “25 percent [tariff] is not sustainable in the long term,” while a rate of 10-15 percent “is manageable.”
Mitigation plans
To soften the blow, Nissan plans to increase the share of American-made parts in cars produced in Mexico. Espinosa also reported that the company is urging the US and Mexican governments “to negotiate a reduction in import tariffs on affordable cars.”
This situation clearly demonstrates the complex interplay between the global logistics of the auto industry, trade policy, and consumer expectations. The ability to offer new cars for around $22,000 appears to be directly dependent on access to lower-cost production facilities, such as those in Mexico. Political decisions that significantly alter the economic equation could lead not to the return of jobs, but to the disappearance of affordable models from the market, affecting manufacturers’ sales volumes and consumer choice. Finding a balance between protectionism and global competitiveness remains a key challenge.
