Honda's Global Production Falls in August, Exports from Japan Rise

Honda's global production declined in August 2025, with Japan production at 44,586 units, a 88.4% YoY decrease. Total production in Japan from January to August 2025 was 438,531 units, a 98.5% of the previous year. Exports from Japan, however, surged with a 126.9% increase in August 2025, with North America receiving 2,037 units, a 270.2% YoY rise.

Honda's global production has experienced a significant decline in August 2025, with a notable drop in Japan's production. According to the latest data, Japan's production stood at 44,586 units, marking an 88.4% year-over-year (YoY) decrease. This substantial reduction is part of a broader trend of shifting production away from Japan, driven by President Trump's tariff policies.

From January to August 2025, total production in Japan has decreased by 98.5% compared to the previous year, indicating a substantial slowdown in manufacturing activities. However, exports from Japan have surged, with a 126.9% increase in August 2025. North America, in particular, has seen a significant rise in imports, with a 270.2% YoY increase to 2,037 units Trump’s tariffs are already spurring Japanese companies to shift more production to the U.S.^[1].

These shifts in production and export patterns are a direct response to the tariffs implemented by the Trump administration. Marcel Thillant, head of the Asia Pacific Region at Capital Economics, noted that companies are intensifying production in US subsidiaries to circumvent these tariffs Trump’s tariffs are already spurring Japanese companies to shift more production to the U.S.^[1]. This trend is evident in Honda's case, where the company is likely redirecting production to the United States to avoid the higher tariffs.

The tariffs have also led to a significant increase in foreign direct investment (FDI) from Japan to the United States. Thillant estimated that the United States may receive 47% of Japan's total FDI this year, the highest level ever recorded Trump’s tariffs are already spurring Japanese companies to shift more production to the U.S.^[1]. This investment is not solely due to the Trump trade deal but is also driven by the strong American economy, which has surpassed Europe as a major destination for Japanese investment.

However, the success of these investments is not guaranteed. Piper Sandler analysts have expressed doubts about the $550 billion Japanese investment pledge, noting that the tariffs are on a fragile legal basis and may not last Trump’s tariffs are already spurring Japanese companies to shift more production to the U.S.^[1]. This uncertainty could impact the long-term viability of these investments.

The revival of American manufacturing will also require a skilled workforce. Jim Farley, CEO of Ford, highlighted the alarming shortage of factory and construction workers in the United States, with a current deficit of 600,000 and 500,000 workers, respectively Trump’s tariffs are already spurring Japanese companies to shift more production to the U.S.^[1]. These challenges underscore the need for a robust workforce development strategy to support the growth of manufacturing in the United States.