Trump threatens Toyota with 'big border tax'

Trump threatens Toyota with 'big border tax'

After Ford and General Motors, it's Toyota's turn to feature in Trump's tweet

The Dollar Business Bureau 

Trump's tweet has yet again sent shock waves through the auto industry with its threat to penalise Toyota with 'big border tax' if it opens a new manufacturing facility in Mexico.

"Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build in U.S. or pay big border tax," Trump tweeted on 5 Jan 2017.

Trying to deliver on his promise to bring back manufacturing jobs to America, Trump has often used his twitter account to target multiple automobile and prevent them from moving production facilities out of the US.

His attempts at meddling with the economy (even before assuming the title of POTUS) have also been rewarded earlier in Ford's case. The auto giant went back on its plans to build a manufacturing facility in Mexico as a result of Trump's strong-arming tactics. Although Ford has cited other pragmatic reasons for its decision to scrap the plant, Trump was quick to take all the credit and the laurels that followed.

In Toyota's case, Trump hurried into browbeating without getting his facts right. Contrary to what his tweet said, Toyota already has a facility in Baja, Mexico. It announced earlier in 2015, its plans to open another plant in Guanajuato, central Mexico.

After the tweet, Toyota released a statement giving assurance that the plant in Mexico was in no way going to detract capacity or employment from its existing production unit in Mississippi.Trump seems to have gone wrong with more than just the location there!

The automaker also said, "Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry."

Donald Trump is treading the same path that Ronald Reagan had chosen during his term as the President of US. The high tariffs he had imposed on select Japanese electronics to boost manufacturing in America did more harm than good to American consumers.

While Trump supporters cheer him on, the ramifications of his 'Make in America' policy are severe, given the fragile condition of America's international relations with the likes of China. A trade war may well be round the corner if 'big border tax' actually materialises.


The Dollar Business Bureau - Jan 06, 2017 12:00 IST