President Elect Donald Trump is at it yet again, having sent a warning shot to Toyota Motor Corp (ADR) (NYSE:TM) over its plans to build Corolla cars destined for the US market in Mexico. In what has become part of his playbook, the next president of the United States says he will tax the Japanese company more, should it go forth with plans to build the cars in Mexico.
Trump Warns Toyota
“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,” said Mr. Trump in a post on Twitter.
Reaction to the remarks has been swift the company’s stock having shed 0.5% in the New York Stock Market as investors continue to analyze the effect of the remarks. Toyota has already defended its practice of producing cars in Mexico reiterating the same has been part of a cultural fabric over the last 60 years.
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Mr. Trump Vs Automakers
The remarks follow a similar warning to Ford Motor Company (NYSE:F), which has had to scrap plans to build a $1.6 billion assembly plant in Mexico. General Motors Company (NYSE:GM) has also not escaped scrutiny from Mr. Trump who insists they will pay higher taxes for Mexico made cars destined for the U.S market.
The Japanese automaker insists that its plans to manufacture the Corollas in a plant in Guanajuato will not affect production volume or employment in the U.S.
Automakers in the United States are already feeling the impact of the Trump’s administration prior to him ascending to power as he continues to affirm a hard stance against them moving south of the border in pursuit of low production costs. Piling pressure on automakers to desist from shifting their manufacturing bases to Mexico is part of an effort by the President-elect to create more jobs for the American people.
Toyota was down by 0.57% in Thursday trading session ending the day at lows of $120.44 a share.