Trump now threatens Toyota with big border tax
The Dollar Business Bureau
US President-elect Donald Trump has now targeted Toyota Motor Corp over its Mexican-manufactured car, threatening the Japanese car makers to pay “big border tax” if shipped Mexico-built cars to the US market.
Earlier this month, Trump criticised General Motors (GM) and Ford Motor for manufacturing their vehicles abroad and shipping them to the US market. The soon-to-be President had accused these companies of costing US jobs.
Another Japanese car maker, Nissan Motor Co, could be at a bigger loss if Trump unveils any tax punishment. Nissan built its plant in Mexico over 50 years ago and now manufactures more than 800,000 cars. The company exports almost half of its production to the US, where it also has production plants.
Japanese automakers produced about 1.4 million vehicles in Mexico in 2015-16, almost 40% of the country's total production. They plan to increase output to 1.9 million by 2019.
Trump said once he comes into power, he will renegotiate the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico, and will impose as much as 35% tariff on cars exported to the US from Mexico.
All Japanese automakers manufacturing cars in Mexico underlined that they have no immediate plans to alter operations and that they will watch Trump’s administration closely and react to the policies Trump adopts.
Trump's criticisms came in the backdrop of Japanese carmaker’s announcement that they were looking to ramp up their production portfolios in Mexico to enhance supply of popular, higher-margin sport utility vehicles (SUV) and trucks to the US.