Wonkblog
Donald Trump just threatened Toyota ― but it looks like he got the facts wrong
By Ylan Q. Mui January 5 at 4:37 PM
President-elect Donald Trump threatened to impose a hefty tax on Toyota Motor it if builds its Corolla cars for the U.S. market at a plant in Mexico. (Reuters)
President-elect Donald Trump continued his Twitter tirade against the auto industry on Thursday, slamming Toyota for investing in Mexico but appearing to misstate key details of the company’s operations.
Trump warned the Japanese carmaker over Twitter that it could face hefty fines for building a plant in Baja, Mexico, to sell the popular Corolla sedan to American consumers. But Trump’s tweet looks to be incorrect: Toyota’s factory in Baja assembles Tacoma trucks, according to the automaker. A new plant in Guanajuato, Mexico, will manufacture Corollas.
That factory broke ground in November, and production is expected to begin in 2019. The work is being shifted to the plant from a facility in Canada. In a statement Thursday, Toyota said that there is no change in employment and production in the United States as a result of the new operations.
“Toyota has been part of the cultural fabric in the U.S. for nearly 60 years,” the company said. “Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry.”
Trump has repeatedly threatened to slap American manufacturers with a border tax if they move jobs and production out of the country and then sell goods back to the United States. But this appears to be the first time that Trump has warned that a foreign company could face similar repercussions, and his tax proposal does not lay out a framework for how a border tax might be implemented.
Trade experts said it is unlikely that the White House has the power to punish individual companies through a border tax, though there is debate over whether Trump could unilaterally fulfill his campaign promises to levy blanket double-digit tariffs on imports from Mexico and China. Generally, that authority lies with Congress, and House Speaker Paul D. Ryan (R-Wis.) voiced staunch opposition to such measures earlier this week.
“No, we’re not going to be raising tariffs,” he told conservative talk show host Hugh Hewitt on Wednesday. “We think tax reform is the better way of addressing imbalances, leveling the playing field without starting trade wars, without having the adverse effects that you get with protectionism or trade wars.”
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