U.S. President-elect Donald Trump is attacking Japan’s Toyota company, the world’s biggest automaker, for its plan to build its Corolla model in Mexico and then sell the compact car in the United States.
“NO WAY!” Trump said in a Twitter message Thursday. “Build plant in U.S. or pay big border tax.”
Trump’s attack on Toyota came two days after he criticized the biggest U.S. automaker, General Motors, for its plan to build its Cruze compact cars in Mexico and then sell the vehicles in the United States. Both GM and Toyota can make their cars with cheaper labor in Mexico and then take advantage of Mexico’s free trade agreements with 40 countries, including the U.S., to ship the cars to overseas dealers.
Trump, who assumes power in 15 days, assailed U.S. trade deals during his lengthy presidential campaign, including the 1994 North American Free Trade Agreement the U.S. has with Mexico and Canada. He says the trade deals have cost American workers their jobs.
The president-elect has vowed to impose a 35 percent tariff on products U.S. companies make overseas and then send back to the United States for sales to American customers. But he would need congressional approval for the tariff and risks starting a trade war with other countries if a sharply higher levy is imposed and higher costs for American consumers buying foreign-made goods.
Toyota says that starting in 2019 its new $1 billion plant in Guanajuato, Mexico, will produce about 200,000 Corolla compact cars a year for the North American market. It is the second-best-selling compact car in the U.S., with 360,000 sales last year trailing only those of Honda’s Civic model.
Toyota already builds the Corolla in the southern U.S. state of Mississippi and in Ontario, Canada, two of 15 manufacturing plants it operates in North America.
Toyota president Akio Toyoda told reporters at a New Year’s gathering Thursday that the company wants to grow employment in whatever countries it operates manufacturing plants, including the U.S. Toyoda said he “would like to closely watch various decisions” Trump makes, including whether he renegotiates the terms of the U.S. trade deal with Mexico and Canada.
General Motors dismissed Trump’s attack on it, saying that it already makes the vast majority of its Cruze models in the U.S. GM said it only expanded its operations at an existing Mexican plant because its Lordstown, Ohio operation in the U.S. industrial heartland was at full capacity and could not meet consumer demand for the car.
Ford Motor, the No. 2 U.S. car maker, this week scrapped its plan for expanded Mexican manufacturing and said it would add 700 jobs in the United States.