Nissan Dodges A $2.3 Billion Tariff Hit By Building More SUVs And Trucks In America
The Localization Strategy
Under Nissan's America-first strategy, the automaker reduced its tariff exposure by $2.3 billion in its last fiscal year, cutting its potential tariff burden by 61% after the import duties took effect in April 2025. That was made possible by increasing domestic production of its SUVs and pickup trucks, including the Rogue, Pathfinder, and Frontier.
According to Automotive News, Nissan increased the domestic production share of its U.S. sales volume by a third to 60%. Nissan Americas Chairman Christian Meunier expects local production to reach 70% of sales by late 2028, once the next-generation Rogue and its e-Power hybrid variant are fully localized in Smyrna, Tennessee, and up to 80% within four to five years.
The Affordable-Car Catch
But despite that financial relief, the strategy is not as straightforward as it sounds. Nissan considered moving production of its affordable models, the Sentra and the Kicks, from Mexico to the U.S., but opted not to because it would be "impractical." That's because vehicles under the $30,000 price point have thin profit margins, and without the benefit of lower production costs in Mexico, the company decided to absorb the 25% tariffs instead.
Nevertheless, Nissan appears to be heading in the right direction in the U.S. market over the long term. In fact, its tariff hit is expected to fall to $1 billion or less in the current fiscal year, according to a person familiar with the matter. That should also be helped by reducing its reliance on imported parts, including those from China.
Nissan Goes Bigger
Aside from existing models, Nissan will further increase U.S. production with new and upcoming body-on-frame vehicles, including the Xterra, which would give the automaker an answer to the Ford Bronco and Jeep Wrangler. The Xterra is expected to be one of five truck-based models being explored for the U.S., with luxury brand Infiniti reportedly planning related models.
If anything, Nissan's approach sounds a bit like the Toyota playbook. Toyota has an extensive U.S. production network and a strong lineup of truck-based models, the kind of vehicles American buyers have long favored. That includes the Tundra and Sequoia. Whether Nissan can replicate that success remains to be seen, but the early signs and projections are encouraging.
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This story was originally published May 12, 2026 at 10:30 AM.