U.S. President-elect Donald Trump's tweet criticizing Toyota Motor Corp.'s plan to build a new car plant in Mexico for exports to the North American market — threatening a heavy border tax if the top Japanese automaker goes ahead with the plan — is an unacceptable act of intervention in private-sector business activities by a person who has yet to take office but whose words carry much weight because they possibly indicate the policies of the incoming administration of the United States. Not only should Toyota stand firm but the Japanese government needs to make its opposition clear to any moves that distort the rules of business and free trade.
Trump's criticism of Toyota's plan may not be surprising given his "America first" campaign rhetoric and his pledge to bring back what he sees as manufacturing jobs lost overseas due to free trade agreements involving the U.S. He has vowed to review and renegotiate the North America Free Trade Agreement — under which major automakers, including Japanese firms, produce cars in Mexico, where production costs and wages are lower, and ship them to the U.S. market tariff-free — and threatened to impose heavy tariffs on imports from Mexico and China. He promised to pull the U.S. out of the Trans-Pacific Partnership pact that Washington concluded with 11 Pacific Rim trading partners as soon as he takes office on Jan. 20.
His earlier tweets lashing out against U.S. automakers has led Ford Motor Co. to cancel its plan to build a new plant in Mexico. He has added similar pressures on companies in other industries as well, with similar effects. Trump's Twitter attack on Toyota was apparently a response to a statement by President Akio Toyoda saying that the firm did not intend to change its plan announced in 2015 to invest $1 billion into building a plant in Guanajuato, central Mexico, where it will produce up to 200,000 Corolla cars a year starting in 2019.