Shares in Japanese carmaker Toyota (TM) shunted higher today on reports that it was set to build a $2 billion manufacturing factory in the U.S. in the wake of President Trump’s tariffs.
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Protection from Trump
According to a Bloomberg article, the factory in Texas, dubbed ‘Project Orca,’ is likely to create 2,000 new jobs. The filing to the Texas Comptroller of Public Accounts details that the site, which will add a new assembly line alongside an existing truck factory, will be located in Bexar County. Construction is set to begin this year with operations having lift-off in 2030.
Not only will the new factory likely boost Toyota’s production numbers, but it also fits part of a wider trend of global automakers trying to shelter from Trump’s tariffs. The U.S. has 15% tariffs on cars and car parts imported to the U.S. from Japan.
Mexico has also been hit by Trump’s tariffs, so it could mean Toyota potentially moving production of its Tacoma pickup to the U.S. from there.
Aligned with Customer Demand
A US spokesperson for Toyota told Bloomberg: “Our production philosophy is to build where we sell and buy where we build. We regularly evaluate our manufacturing footprint to ensure we remain competitive and aligned with customer demand. This reflects our long-term commitment of investing in the North American region, local manufacturing/jobs, and suppliers.”
This is likely to be music to the ears of President Trump given that boosting U.S. manufacturing and jobs is a key driver behind his tariffs plan.
Other Japanese carmakers have been looking at increasing their U.S. production in the wake of higher tariffs. Honda (HMC) has previously announced plans to make its next-generation Civic hybrid in the U.S. state of Indiana rather than in Mexico.
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