German automaker Mercedes-Benz announced on Thursday that it will move production of one of its “core segment” vehicles to the United States, nearly a month after President Donald Trump’s 25% tariff on imported vehicles took effect.
Mercedes did not specify which vehicle it will begin producing in the United States, but said that a “core vehicle segment” would be manufactured at a factory in Tuscaloosa, Alabama, Bloomberg reported. The automotive company plans to shift vehicle assembly to the United States by 2027.
“We are getting even closer to the U.S. customer by localizing a core segment model in Tuscaloosa, strengthening our ties to the North American market where a range of Mercedes-Benz vehicles, including the GLE and GLS models, have their roots,” said Mercedes-Benz North America CEO Jason Hoff.
The White House celebrated the announcement from Mercedes, saying in a statement, “Today, Mercedes-Benz announced it will move production of another vehicle to the U.S. — the latest result of President Donald J. Trump’s relentless pursuit of American manufacturing dominance.”
Mercedes added that the Alabama plant has become “the global export hub for Mercedes-Benz SUVs.” The Mercedes GLC sport utility vehicle has become increasingly popular in the United States, seeing a 58% increase in sales last year. Bloomberg reported last month that Mercedes was considering pulling its least expensive vehicles from the U.S. market due to tariffs.
Earlier this week, Trump struck a deal with the auto industry to provide some tariff relief in return for commitments to bring more manufacturing back to the United States. Under new tariff rules, auto manufacturers will continue to pay a 25% tariff on imported vehicles, but they will not be subject to any additional levies, such as those on steel and aluminum.
American auto CEOs thanked Trump for the tariff relief and pledged to continue seeking ways to increase domestic production. Other foreign auto companies have also said they will ramp up investments in the United States following Trump’s tariffs. Hyundai announced a $21 billion investment in the United States over the next four years, starting with a steel plant in Louisiana that is expected to create nearly 1,500 jobs. BMW, another German automaker, is also looking to boost manufacturing in the United States.
