Expansion and suspension of production at the same time: U.S. production capacity is like heaven and hell

The US tax increase may scare tire companies. The escalating trade tensions have made some companies regret not insisting on building factories in the United States, and companies that have built factories have begun to think about expanding production capacity. Among them, Hankook Tire announced plans to double the tire and battery production capacity of its Tennessee plant in the United States.

Hankook Tire plans to double its North American production capacity
On March 27, 2025, Hankook Tire issued a statement saying that it is looking for solutions to the current US tariff measures.

However, as early as 2022, Hankook Tire has launched a global capacity layout strategy. One of the measures is to expand the annual production capacity of North American tires from 5.5 million to 12 million; and double battery production to 3 million per year. In fact, as early as the past few months, Hankook Tire held a regional strategic meeting at its headquarters in Seoul to review and improve its global capacity planning. One of the key components of the plan is to expand tire manufacturing capacity in Tennessee.

At the same time, based on the actual needs of the US market, Hankook also aims to expand its business in the high-profit tire field of SUVs and electric vehicles. Hankook Tire's plan to increase its North American production capacity reflects a series of concerns in the current tire industry about US tariffs. "As the risk of tariffs from the United States grows, Hankook is considering more than doubling its production capacity to enhance its operational resilience."

Manufacturers re-arrange global production capacity
In addition to tire companies, the automotive industry is also anxious about future exports to the US market, especially when the United States announced a 25% tariff on all cars and their important parts exported to the United States, the concerns of practitioners in the automotive and tire industries rushed to the top of their heads.

It is reported that Korean automaker Hyundai Motor Group announced plans to invest $21 billion in the United States for capacity expansion.

Hankook US Tire Plant
If the expansion continues this year, Hankook Tire's factory expansion project has not stopped since 2022. In 2022, Hankook announced an expansion plan of approximately RMB 12.5 billion at its Clarksville tire plant in Tennessee, and implemented the plan in the following two years. It is reported that with the commissioning of the new project in 2026, Hankook Tire's passenger car tires will reach an annual production capacity of 11 million and produce 1 million truck and bus tires per year.

The suspension and expansion of tire production in the United States
However, not all tire companies have such an idea.

After all, in the past five months, at least four well-known tire companies have either cut or simply stopped tire production capacity. These tire companies do not seem to regret their decisions. Sumitomo Rubber also recently made clear its determination to close its tire factory in the United States. In Sumitomo Rubber's view, the rising cost of tire manufacturing in the United States is more terrible than tariffs.

However, there are rumors that some tire companies have regretted giving up the decision to build a factory in the United States. After all, the reason behind the United States' high-profile announcement of an increase in tariffs is to stimulate the recovery of North American domestic manufacturing, which seems to mean that building production capacity here may get better incentives...