President-elect, Donald Trump is indeed doing what he stated he would, during his presidential campaign, however, at what cost to the country. One of the largest automobile giants on a global scale, Toyota Motor Corp (ADR) (NYSE:TM), was recently threatened by Trump, regarding the new plant, which they announced they plan to build in Mexico.
However, in order to scare them into not selecting that location for their plant, Trump stepped in and informed them that if they persist with their plans for Mexico, he will launch a big border tax, which Toyota, would be liable to pay.
Japans Retaliation on Trumps Threat
This is not the first time that Japan has illustrated the desire to build a facility in Mexico, it was originally discussed in April 2015. However, Trump is doing everything in his power, to ensure that this does not happen.
However, despite the threats from the president-elect, the company has not yet shown any sign that they will diverge from their plans to construct a facility in Mexico, and not the United States, which is what Trump is pressuring them into doing.
However, Japan is not sitting idly to the threats of Trump, the country has invested resources into protecting Toyota, as they are allegedly considered ‘an important citizen of Japan’. This includes the likes of incorporating help from the Chief Cabinet Secretary Yoshihide Suga, as well as Trade Minister of Japan, Hiroshige Seko.
Both important government officials, spoke in the defense of the Japan orientated automobile company, stating that through implementing a factory in Mexico, the company would not have a large impact in workforce reduction throughout the United States, they emphasized this through explaining that there are already Japanese automobile facilities throughout Mexico.
The reason behind Trumps threat
It is clear that Trump is trying to direct as much workflow towards the United States, and prevent companies, such as this one branching to cheaper labor, through regions like Mexico. This is further emphasized by the recent closure of a Ford Motor Company (NYSE:F) branch in Mexico, which Trump took the credit for.
Trump announced his debate through a tweet, where he stated, “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for the U.S. NO WAY! Build plant in U.S or pay big border tax.”
Ford stock closed on Monday at $12.76, after witnessing a decline of $0.01 or 0.08%
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