Trump’s car invoices are concerned about Toyota and Japan’s automakers

Prior to the election, Toyota Motor and other Japanese automakers believed that a second Trump administration could be good for them.

President Trump had fought for the disassembly of policies aimed at rapidly accelerating the US car industry’s shift from fossil fuels and electric vehicles that Toyota and other top gasoline and hybrid gasoline manufacturers also had a lot of gasoline.

Toyota gave $ 1 million to the inauguration of Mr Trump in January and participants at the Dallas delegation meeting, who said it was full of Trump Cheer.

But as Mr Trump’s agenda has been shaped, much of this optimism has become alarm.

In February, the administration signed an executive order imposing 25 % invoices for goods from Mexico and Canada, where Toyota and other Japanese companies collect many of the cars they sell in the United States.

The administration said on April 2, it would announce “mutual invoices” in countries that manage large trade surplus with the United States – a move that is widely expected to influence Japan and its cars.

Japan is one of the largest car exporters in the world and the United States is the largest market for companies like Toyota; Honda, Nissan, Mazda and Subaru. So, as the deadline for duties approaches, Japan is now preparing for a blow that could be disastrous not only in the profits of the nation’s automakers but in its overall economy.

With Japan’s economy that has already stifled inflation, some economists estimate that if Mr Trump’s car invoices come into force as threatened, they could eliminate 40 % of possible economic growth this year.

Mr Trump has long been a militant relationship with Japanese car companies. In the 1980s, when he threw the possibility of a presidential route, Mr Trump broke the highways from Japan, once telling Oprah Winfrey that they were coming to the United States and “hitting hell” local manufacturers.

Shortly after Mr Trump’s election for the first time in 2016, Toyota proceeded with plans to invest $ 10 billion in the United States. Former Japan Prime Minister Shinzo Abe – who was considered a specialized whisper of Trump – took advantage of the president’s love for storm and secured a promise not to impose additional duties on Japanese cars.

Japan’s success in dealing with invoices for the first time was part of the reason why many leaders in the automotive industry were authoritarian – and even promising – for another term Trump. The other reason, especially for Toyota, included electric vehicles, which Mr Trump had been ridiculed mostly before recently declared himself Tesla’s fans, the company run by Elon Musk’s close director.

In the early 2020s, when many of its competitors rushed to electric vehicles, Toyota kept a firm in the hybrid gas-electric gas cars that had pioneers in decades earlier. The company argued that the world was not fully ready for electric vehicles. It was expensive for consumers and the infrastructure required to charge their batteries remained incomplete.

The automakers were also mainly selling electric vehicles with loss. The prospect of Mr Trump’s rolling initiatives aimed at rapidly transitioning to electric cars was considered a way for Toyota to buy time, as it had only an electric mass market available in the United States.

Toyota was pressured against the stricter contamination limits from the Biden area and supported politicians in the United States, who were against what they were considered to be “orders” to sell more electric vehicles. Much of this pressure exercise came through Toyota’s car dealers network, some of which, after being caused by Toyota, transferred their concerns about a quick transition to electric vehicles to elected officials, according to correspondence examined by the New York Times.

A Toyota spokesman said that by providing customers affordable vehicles and various options was the best way to reduce emissions as soon as possible, which is the target of the company. “A consumer -based market will bring more stability and healthy competition to the automotive industry,” he said.

During a January delegation meeting in Texas, Toyota’s North America’s leaders said they believed that the company had kept stable during the presidency of Joseph R. Biden Jr. And that they were now hopeful that they had more “like -minded politicians” in power positions, according to two people who attended the event that had not been authorized to speak publicly.

Next month, Mr Trump described plans for invoices that could hit the exports of cars from Canada, Mexico and possibly Japan.

Trump administration plans for invoices have often been shifted. However, the prospect of new taxes for foreign cars is already weighed by Japanese car companies and some of their delegations in the United States.

In Maine, Adam Lee is the president of Lee Auto Malls, one of the largest state delegation groups. Lee Auto Malls sells brands, including Toyota, and last month had the worst February in terms of net profit since 2009.

As Mr Trump has revealed the agenda of their duty in the last two months, “the faith in the economy seemed to be the lowest that has been over for a long time,” Mr Lee said. “People don’t buy cars when people are in chaos,” he added.

Analysts expect from Japan and South Korea, due to their high presence in the United States and the tendency to import many of the cars they sell there, to be the automatic countries most exposed to Mr Trump’s proposed invoices.

Toyota made about one million of the 2.3 million cars sold to the United States last year outside the country. Nissan and Honda executives warned that Mr Trump’s invoices would deeply chart their profits.

For Japan, whose top export is cars, a 25 % invoice to car exports in the United States could reduce the country’s gross domestic product by about 0.2 % this year, according to estimates by the Japan Nomura Research Institute.

Since Japan’s economy has a potential growth rate of only about 0.5 % this year, a 0.2 % blow to GDP will represent a “significant blow”, according to the research institute.

At present, some Japanese car companies are trying to accelerate missions to the United States before April 2. They also begin preparations to increase production to the extent that they can in the 24 production plants operating within the United States.

In the last seven decades, Toyota has invested more than $ 50 billion in the United States and will continue to deepen these investments, a company spokesman said. Including the United States, where it is directly employed by more than 49,000 people, Toyota’s philosophy has always been to “build wherever it sells and buys where it builds,” he said. Toyota is also fully compatible with the United States-Mexico-Canada trade agreement, he added.

The teams representing the automakers in Washington also work in their contacts at Capitol Hill. They hope that legislators can help in the case of how much Japanese car manufacturers are investing in the United States and how invoices could harm American consumers by increasing prices.

So far, Japanese officials have failed to obtain promises of invoices.

Three people involved in the efforts to exercise pressure, who talked about the condition of anonymity to discuss private conversations, say they repeatedly ask: are there new investments that can be committed or to those who can be re -established as inspired by the new president?

At the moment, people have said, do not have new big projects to show.

Most Japanese automakers do not have excessive production capacity in the United States, according to Michael Robinet, Vice President of the S&P Global Mobility. This means that if they want to build more vehicles, they should build new factories.

However, factories will take years to build and seek significant investments from companies that are currently facing a “extremely unstable commercial environment”, Mr Robinet said. “The automakers are not going to make decisions that have a lot of zero behind them unless they know they have a stable business case,” he said. “And now they don’t.”