Japan defends Toyota after Trump broadside over Mexican plant
By Thomas Wilson
TOKYO (Reuters) - The Japanese government defended Toyota Motor Corp (7203.T: Quote) on Friday as an "important corporate citizen" of the United States, after President-elect Donald Trump singled out the automaker and threatened to slap punitive tariffs on its Mexico-built cars.
Trump has repeatedly hit out at U.S. companies for using lower-cost factories abroad at the expense of jobs at home. He has slammed U.S. automakers, including Ford (F.N: Quote) which this week scrapped a planned $1.6 billion Mexico plant.
But the attack overnight on Toyota is his first against a foreign automaker. "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 tweeted.
Toyota shares fell more than 3 percent before recovering, and Honda Motor Co (7267.T: Quote) and Nissan Motor Co (7201.T: Quote) slid around 2 percent - even as the government and analysts sought to brush off the impact of the attack.
Chief Cabinet Secretary Yoshihide Suga told reporters on Friday that Toyota was an "important corporate citizen", while Trade Minister Hiroshige Seko stressed the contribution of Japanese companies to U.S. employment.
"We think the impact on business performance is limited," Akira Kishimoto, a senior analyst at JP Morgan, said in a note.
"A cool judgement is needed."
Toyota's exposure to Mexico is limited, Kishimoto said, adding that even an "extreme case" tariff of 20 percent would hit its operating profit by around 6 percent. Trump has threatened a 35 percent tariff on cars imported from Mexico. Continued...