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Trump reiterates threat to hike tariffs for Japanese car makers through tweet

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US president-elect Donald John Trump has now turned his wrath to Japanese carmakers after hinting on twitter that he would impose a big border tax on Toyota if it built a new plant in Mexico.

Through his presidential campaign, Trump said he would punish American companies that moved manufacturing plants offshore. The elect president’s tweet saying “A big No!” to the Mexico plant was followed by Toyota shares dropping more than 3% in morning trade in Tokyo on Friday.

The tweet also had an effect on the cross-pacific trade after Nissan and Honda also fell. Toyota responded in defense saying the company has tried to be a good corporate citizen in the United States along with contributing hugely to the state’s economy.

“With more than $21.9bn direct investment in the US, 10 manufacturing facilities, 1,500 dealerships and 136,000 employees, Toyota is looking forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry,” Toyota said in a statement.

Although not directly addressing the president-elect, the economy, trade and industry minister, Hiroshige Seko, said the carmaker had contributed to the creation of American jobs.

“Japanese automakers are making significant contributions in terms of jobs in the United States,” he told reporters. “It is important that their efforts and results are widely accepted. This is an issue involving a private company but the government is ready to support it.”

Japanese firms employ more than 800,000 people in the US and contributed $78bn to US exports in 2014, according to the US embassy in Tokyo.

Nissan and Honda both have plants in Mexico where they produced 830,000 and 263,000 cars respectively in the last year. Having made a huge investment in the country, the companies may face high trade tariffs.

Ford Motor,on the other hand,scrapped plans to erect a $1.6bn plant in San Luis Potos, Mexico after Trump called on the company to create jobs at home.

Trump has repeatedly threatened to impose a 35% tax on small cars made in Mexico and in the past week criticized General Motors for importing Chevy Cruze vehicles from Mexico.

Reaction to browbeat-ness

Some citizens have shown support of Trumps browbeat way of leadership saying he is just saying out loud what most Americans have in mind. Most of them citing that Japan is not the best at being fair and balanced in their trade pacts with the US.

Others have condemned the elect president’s remarks saying he is jumping the gun by ignoring laws that govern trade internationally. Some have warned that he is playing a dangerous game before assuming office. With most of them being condemning, it is still not clear whether Trump will go ahead and implement them once he assumes office on January 20th.

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Melissa Daniels
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