Mexico-U.S. deal includes Mexican auto export cap that could hurt Japanese automakers

The Japan Times

WASHINGTON/MEXICO CITY – A proposed U.S.-Mexico trade deal would allow U.S. President Donald Trump to impose punitive tariffs of up to 25 percent on imports of Mexican-made cars, sport utility vehicles and auto parts above certain volumes, auto executives and sources said Tuesday, in a move that could hurt Japanese automakers with operations in Mexico. The United States and Mexico agreed Monday to overhaul the North American Free Trade Agreement, pressuring Canada to agree to new auto trade and dispute settlement rules to remain part of the three-nation pact. But a previously unreported side agreement between the two countries would allow the United States to impose "national security" tariffs on annual Mexican car and SUV imports of over 2.4 million vehicles. The side deal would allow national security levies on auto parts imports above a value of $90 billion per year. The administration plans to announce the results of a probe into whether autos and part imports pose a national security risk in the coming weeks.

Trump: Toyota faces big tax if it builds Corollas for US in Mexico - Trump's deportation vow spurs farmers into action

FOX News

U.S. President-elect Donald Trump on Thursday targeted ToyotaMotor Corp 7203.T, threatening to impose a hefty fee on the Japanese automaker it if builds its Corolla cars for the U.S. market at a plant in Mexico. "Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax," Trump said in a post on Twitter. This was Trump's latest broadside against automakers building cars in Mexico and first against a foreign automaker. The president-elect's attacks on investments by companies in Mexico have cast a shadow over cross-border production networks central to more than $583 billion a year in trade between the two countries. The value of the Mexican peso has skidded amid fears that Trump's policies would harm Latin America's second-biggest economy.

Carmakers bet on Mexico based on NAFTA rules, may get sideswiped by Trump's threatened tariff

The Japan Times

DETROIT/WASHINGTON – The threat from President Donald Trump to tax Mexican-made cars sold in the U.S. would throw the auto industry into disarray, analysts say, forcing uncomfortable choices: Raise car prices or swallow the cost. Move production to the U.S. but make less money. "I don't think the auto industry would turn up its feet and die, but it would be a terrible shock. It would create mayhem with their profitability," said Marina Whitman, a business professor at the University of Michigan and a former vice president at General Motors Co. Trump hosted a breakfast meeting early Tuesday with the heads of General Motors, Ford Motor Co. and Fiat Chrysler Automobiles. Prior to the meeting, Trump tweeted that he wants "new plants to be built here for cars sold here."

Toyota to swap sedans for trucks, maybe SUVs at new Mexico plant in light of Trump threat

The Japan Times

MEXICO CITY – Toyota Motor Corp. said Friday it plans to build pickup trucks and possibly SUVs at a new plant in Mexico, a move that follows threats by U.S. President Donald Trump to penalize the company if it builds small cars south of the border. Toyota initially planned to produce Corolla sedans at the plant it is building in the central state of Guanajuato but will now shift production of the small cars and a new Mazda SUV crossover to a new assembly plant planned for the United States. Trump threatened in January to impose a hefty fee on the world's largest automaker if it built Corollas for the U.S. market in Mexico. Toyota de Mexico spokesman Luis Lozano said the global automaker will study producing SUVs in Guanajuato, in addition to the Tacoma truck model. "We're going to concentrate only on pickups at the beginning and are studying the potential for SUVs in the future," he said.

Carmakers all ears as Detroit auto show begins amid talk of NAFTA and the tax cuts

The Japan Times

DETROIT – The Detroit Auto Show shifted into full gear Sunday with international trade and tax cuts dominating the conversation, even as an optimistic industry raced to meet Americans' seemingly insatiable appetite for trucks and SUVs.