Business

Japan to keep close eye on business impact of U.S.-Mexico spat

Kyodo, Staff Report

Japanese officials said Friday they will pay close attention to how emerging trade tensions between the Trump administration and Mexico could affect Japanese firms, including major automakers that trade heavily across the border.

“Japanese companies have based parts of their supply chains in Mexico, so we want to watch closely to see whether they might be affected,” Economy, Trade and Industry Minister Hiroshige Seko told a news conference following a Cabinet meeting.

Mexican President Enrique Pena Nieto on Thursday canceled a meeting with U.S. President Donald Trump after Trump’s press secretary said that the president, who campaigned on an “America First” platform, is considering imposing a 20 percent tax on all imports from Mexico to pay for a proposed wall along the border.

Several Japanese automakers manufacture vehicles in Mexico for export to the U.S. market by taking advantage of cheap labor costs and the North American Free Trade Agreement.

They said on Friday they were still assessing the impact of Trump’s policy.

“It is too early for us to comment, as there are many uncertainties at this point. We are watching the situation closely,” a spokesperson at Toyota Motor Corp. said.

Toyota currently has one factory in Mexico, which can manufacture up to 90,000 Tacoma pickup trucks annually. Japan’s biggest carmaker is planning to open another factory there in 2019.

Nissan Motor Co., which has the largest production capacity in Mexico among carmakers, said there was nothing to comment on at this point.

Finance Minister Taro Aso expressed skepticism Friday over the tariff proposal, noting that the U.S.-Mexican trade relationship went both ways.

Asked whether Prime Minister Shinzo Abe might press Trump on the issue in a bilateral summit expected in the coming weeks, the government’s top spokesman said Friday that the specifics of the cross-border trade issue are still too unclear.

“In any case, Japan will thoroughly appeal to (Trump) about the importance of a liberal economy,” Chief Cabinet Secretary Yoshihide Suga told a news conference.

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