Japanese leaders question Trump’s protectionism after he hits Toyota

January 7, 2017

TOKYO- Japanese political and business leaders questioned U.S. President-elect Donald Trump's protectionist stance Friday after he blasted Toyota Motor Corp.'s plan to build vehicles in Mexico, while the Japanese carmaker stressed its contribution to the U.S. economy. Toyota said in a statement that "production volume or employment in the U.S. will not decrease" as a result of its new plant in Mexico announced in 2015. Toyota is the largest automaker in Japan and the third biggest in the United States in sales. "Toyota looks forward to collaborating with the Trump Administration to serve in the best interests of consumers and the automotive industry," the statement said. The president-elect threatened Thursday in a Twitter message to impose heavy taxes on Toyota if the automaker goes ahead with its plan to produce Corolla cars for the United States in Mexico. The tweet came after Toyota President Akio Toyoda said in Tokyo that the automaker has no immediate plans to reconsider its envisaged production in Mexico. Toyota sold over 2.44 million cars in the United States last year, making it the third largest in the market after General Motors Co. and Ford Motors Co. "I wonder if the president-elect knows the amount of cars Toyota produces in the United States," Finance Minister Taro Aso told a press conference. Other Japanese business leaders voiced hope for an open business environment under the incoming Trump administration. "I request world leaders to guarantee a free flow of people, products, money and information," Sony Corp. President Kazuo Hirai said Thursday in Las Vegas where he is attending the Consumer Electronics Show, an annual global trade show. Sony exports DVDs produced in a plant in Mexico to the United States. "It is important how we react to the more specific plans he will have when he becomes president," he said. Nissan Motor Co. Chief Executive Officer Carlos Ghosn said he will pay close attention to Trump's trade policy. "We all want to be watching carefully...what's going to be the new policy, what's going to be the rules, particularly North American (trade) rules," Ghosn told reporters in Las Vegas. Trump has said he will focus on putting "America First" by pressing companies to keep jobs and production in the United States, vowing to renegotiate the North American Free Trade Agreement, a deal concluded by the United States, Canada and Mexico. Ghosn indicated patience is needed ahead of Trump's inauguration Jan. 20. "Nothing (has) happened so far," Ghosn said, while adding that he "is fine" with the president-elect's "America First" stance to create new jobs. Nissan, Japan's second-largest automaker, has major export bases in Mexico. It launched its Mexican production in the 1960s followed by Honda Motor Co. in 1995 and Mazda Motor Corp. in 2014. Yoshimitsu Kobayashi, head of the Japan Association of Corporate Executives, pointed out that the U.S. president-elect signaling protectionism could be part of his strategy. "We don't have to fully accept it, but it does raise concern," he said. Kobayashi added that Toyota does not have to follow Ford Motor that cancelled plans this week to build a new factory in Mexico but warned that it would be "risky" for Japanese firms to consider launching new operations there. Minister of Economy, Trade and Industry Hiroshige Seko told a press conference that the government will support the Japanese car industry despite Trump's threat. The Japanese car industry has already established a local production system in the United States, he added. "I don't think there are plans to move U.S. production bases overseas, including to Mexico," said the trade minister. But with Trump indicating that the United States could slap a 35 percent tariff on imports from Mexico, a major Japanese carmaker official said that an extreme rise in tariffs, if it happens, "could lead to a possible reviewing of our production (in Mexico)." Honda President Takahiro Hachigo told reporters Thursday that the company plans to stay in Mexico hopefully "for the continuation of the NAFTA deal." Mazda CEO Masamichi Kogai also said earlier in the week that the automaker's Mexican plant will remain a core manufacturing base. (Kyodo News)