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Mercedes-Benz announced on Thursday that it will build another vehicle in the U.S. as the “Trump effect” continues to impact American manufacturing.
The company will produce a new vehicle at its Tuscaloosa, Alabama, plant by 2027 in response to tariffs on imported cars imposed by Trump’s administration.
“Tuscaloosa has been a key hub for Mercedes-Benz vehicles for almost 30 years,” said Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group AG.
“It’s a natural step to bring a further model to Alabama as part of a strategy to deepen our commitment to the United States, a market which has been our home for more than a century,” he added.
The German automaker did not specify which model would be produced but referred to it as a “core segment” vehicle. The Tuscaloosa facility currently manufactures models including the GLE, GLS and EQS SUVs, serving domestic and global markets.
In 2024, the plant produced approximately 260,000 vehicles and employed over 11,000 workers.
An article from the White House noted, “Mercedes isn’t the only automaker onshoring production as President Trump incentivizes making things in America again,” listing multiple automakers moving additional production to the U.S.
The decision aligns with a broader trend of automakers increasing U.S. production in response to the tariffs. Companies like BMW, Honda, Hyundai and Toyota have announced similar shifts or expansions in their U.S. manufacturing operations.
President Trump recently signed executive orders providing exemptions and reimbursements on steel and aluminum used in car manufacturing, aiming to ease the impact of the tariffs. Vehicles with at least 85 percent American-made components will be exempt from these tariffs, encouraging automakers to localize production.
Despite these measures, the tariffs have had significant financial implications for automakers. Mercedes-Benz withdrew its earnings guidance for 2025, citing uncertainties caused by the tariffs, and reported a 41 percent drop in first-quarter earnings before interest and taxes. The company also noted challenges in major markets, including intensified competition in China and CO2 regulations in the European Union.
Alabama Republican Gov. Kay Ivey welcomed Mercedes-Benz’s announcement, stating, “Their decision to launch production of a new core vehicle in Tuscaloosa shows global companies have confidence in our state and workforce.”