Japanese auto giant Toyota said Tuesday it will shift production of its mid-size Tacoma pick-up truck from Mexico to the United States as part of a $3.6 billion investment in its Texas plant.
The announcement comes just days after Washington declined to renew a North American trade pact with Mexico, as well as Canada, fuelling uncertainty for businesses.
Toyota said in November it planned to invest as much as $10 billion in the United States over the next five years.
The world's largest automaker by vehicle sales, Toyota plans to build a second assembly line at its San Antonio factory, creating more than 2,000 jobs and increasing annual production capacity at the plant by 150,000 units, the company said in a statement.
"The investment is aimed at further enhancing Toyota's locally rooted and competitive production system," the company said, adding that the new line is expected to become operational in 2030.
Toyota and other major automakers are shifting production to the United States, as President Donald Trump raises tariffs on automobiles, steel and aluminium, among other items.
Global automakers -- including U.S. car manufacturers -- have in the past produced in Mexico, among other countries, to benefit from various trade deals, including the existing US-Mexico-Canada Agreement (USMCA).
Although that pact remains in force for another 10 years, Washington said last week that the trade agreement will now be reviewed annually, a move expected to impact investor sentiment.
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