Donald Trump's Twitter campaign against the auto industry has gone global.
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 the national government and another top carmaker to step into the fray.
Japan’s chief government spokesman Yoshihide Suga defended Toyota on Friday, saying it has been “a good corporate citizen for the U.S.”
Trump opposes Toyota’s plans to set up a new plant in Mexico even though the company says it won’t cost the U.S. any jobs. He threatened to slap a “big border tax” on Toyota cars if the plant isn’t built in the U.S.
Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.
— Donald J. Trump (@realDonaldTrump) 5 de enero de 2017
The president-elect’s attacks on individual companies are spooking other automakers.
“We need laws, regulations, expectations, policies to be announced, and we follow 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 concerned. 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 biggest 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 , Chrysler, Ford, Volkswagen and Hyundai , making them potentially vulnerable to Trump’s “big border tax.”
“There would be a difference in impact, (but) everybody has a big plant in Mexico,” Endo said.
After Trump’s threat, Toyota and the Japanese government highlighted the important links between Japan’s automobile industry and the U.S. economy.
Trade Minister Hiroshige Seko said Japanese auto firms make a “huge contribution” to the U.S., putting the number of jobs they support at 1.5 million.
That estimate appears to include jobs throughout 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 watch how the strategy will move and how he will express something new,” a Honda spokeswoman said.