Japanese Automakers Worried about U.S. Tariffs on Mexico

Tokyo, June 1 (Jiji Press)--Japanese automakers are alarmed by U.S. President Donald Trump's surprise threat to impose tariffs of up to 25 pct on imports from Mexico. Four Japanese automakers, including Nissan Motor Co. and Mazda Motor Corp., assemble vehicles in Mexico to take advantage of cheap labor for sale in the key North American market. The tariffs are expected to hit these Japanese automakers hard enough to force them to reconsider their approaches to the region. Tit-for-tat tariffs between the United States and China have already been weighing on Japanese automakers. China's economic slowdown led to a decrease of over 20 pct in Mazda's vehicle sales there in the year ended in March from the previous year. U.S. tariffs on Mexican goods "will be a bigger threat to the Japanese auto industry," an official at a major Japanese automaker said. Nissan is expected to be hit the hardest. It assembled 769,000 vehicles in Mexico last year, with roughly half of them exported to the United States. Some 20 pct of Mazda vehicles sold in the United States are made in Mexico, while Toyota Motor Corp. relies on Mexico for about 7 pct of its total sales in the United States. Trump's latest tariff threat comes at a time when the Japanese auto industry is pinning high hopes on a revised U.S. trade agreement with Canada and Mexico. "Any response depends on market conditions," said an official at another major Japanese automaker. END