Trump s Toyota attack sets off alarm bells in Japan – Jan
Trump’s Toyota attack sets off alarm bells in Japan
After berating Ford and GM, the U.S. president-elect is now going after Toyota for making cars in Mexico for the U.S. market. His attack has set off alarm bells in Japan, prompting top politicians and another major carmaker to step into the fray.
Japan’s chief government spokesman Yoshihide Suga said Toyota ( TM ) has been “a good corporate citizen for the U.S.” And Japan’s finance minister, Taro Aso, was quoted by the Nikkei newspaper as telling it was “questionable whether the fresh president understands. how many vehicles Toyota produces in the U.S.”
Trump opposes Toyota’s plans to set up a fresh plant in Mexico even however the company says it won’t cost the U.S. any jobs. He threatened to spank a “big border tax” on Toyota cars if the plant isn’t built in the U.S.
The president-elect’s attacks on individual companies are spooking other automakers.
“We need laws, regulations, expectations, policies to be announced, and we go after it,” Nissan and Renault CEO Carlos Ghosn said in an interview with the Financial Times after Trump’s Toyota tweets. “Because this has got to apply to everybody, we’re all in the same boat.”
Ghosn has good reason to be worried. Nissan could suffer more than other automakers if Trump imposes high tariffs on cars manufactured in Mexico, according to Koji Endo, an auto analyst at Advanced Research Japan.
Nissan is one of the largest carmakers in Mexico, employing more than 14,500 people and producing 850,000 vehicles per year. About 30% of Nissan cars sold in the U.S. are exported from Mexico, Endo estimates, compared with just 5% for Toyota.
Other international carmakers that use Mexico for manufacturing include GM ( GM ) , Chrysler ( FCAU ) , Ford ( F ) , Volkswagen ( VLKAF ) and Hyundai ( HYMTF ) , making them potentially vulnerable to Trump’s “big border tax.”
“There would be a difference in influence, (but) everybody has a big plant in Mexico,” Endo said.
After Trump’s threat, Toyota and the Japanese government highlighted the significant links inbetween Japan’s automobile industry and the U.S. economy.
Trade Minister Hiroshige Seko said Japanese auto firms make a “hefty contribution” to the U.S., putting the number of jobs they support at 1.Five million.
That estimate shows up to include jobs via the supply chain. Toyota says it employs 136,000 workers in the U.S.; Nissan says it directly employs 22,000.
Honda, another of Japan’s top automakers, has 16,000 employees in U.S. manufacturing plants. It says it doesn’t have any plans at the moment to add to its Mexican factories, but it’s still keeping a close eye on Trump’s pronouncements.
“We will just witness how the strategy will stir and how he will express something fresh,” a Honda spokeswoman said.
— CNN’s Junko Ogura contributed to this report.