The last time US politicians pissed off the Japanese, is when several US congressmen took sledge hammers to a Toshiba electronics product out on the front lawn of the White House years ago and smashed it to pieces in protest over Japan’s “unfair trading practices” with the US. Toyota stocks took a hit yesterday when president-elect Donald Trump told Toyota he would “penalize Toyota heavily” on their automobiles coming into the US from Mexico if Japan went through with their plans to build a Toyota manufacturing plant in Mexico. Looks to me America is about to go through a resurgence of national self-interest after January 20th when Donald Trump is inaugurated with the US and China moving closer all the time towards a trade war. This is a phenomenal digital experience we are going through as the world reacts to Donald Trump’s twitter comments. Who would have ever thought a US president could send stock shares dropping through the floor of a company by a twitter comment?
Source: Zero Hedge
An Angry Japan Responds To Trump’s Toyota Taunts
by Tyler Durden
January 6, 2017
After Trump’s Thursday morning twitter taunt targeted Toyota, when the President-elect warned Japan’s biggest carmaker that it will face heavy penalties if it chooses to make cars for the US market in Mexico, writing “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“, a tweet which sent shares of Japanese carmakers sliding on Friday with a 1.7% fall for Toyota, 2.2% for Nissan and 3.2% for Mazda, an angry Japanese government and corporate establishment pushed back against Trump’s criticism of Toyota as the attack on the country’s most powerful corporate name sent shockwaves across “Japan Inc.”
As the FT notes, CEOs of Japanese companies including Sony’s Kazuo Hirai and Nissan’s Carlos Ghosn weighed in, while analysts feared the president-elect’s targeting of Toyota would lead to a broader fallout on Japan-US trade relations, similar to concerns about an escalating trade war between the US and China.
“Toyota is responsible for large employment at US plants such as in Kentucky. It’s questionable whether the new US president has a grasp of how many vehicles Toyota builds in the US,” said Taro Aso, Japan’s finance minister. Hiroshige Seko, minister for trade and industry, added that the Japanese government would do its part to explain to the US administration about the contribution of the country’s car industry to the US economy.
“Toyota is equivalent to Japan as a whole, so Mr Trump’s criticism could be interpreted as a message to the Japanese government,” said Koji Endo, motor industry analyst at SBI Securities, expressing concerns about the impact on bilateral trade negotiations once Mr Trump is officially appointed later this month.
Analysts said Trump’s focus on Toyota, after Ford this week announced that it would pull plans for a $1.6bn Mexican plant, is not surprising but ironic for the Japanese carmaker who was the latecomer among global rivals in shifting production to Mexico. They noted that Toyota, which has an existing manufacturing facility in Baja to build the Tacoma pick-up truck, only made about 6% of 2.2m vehicles sold in the US in Mexico during the January to November period, compared with 33% for Nissan and 47 per cent for Mazda, according to SBI Securities, both of which companies are said to be far more exposed to Trump’s future ire than Toyota.
Please go to Zero Hedge to read the entire article