Trump Warns Toyota To Face "Big Border Tax" If Mexico Plant Builds US Corollas

Jan 06, 2017 06:30 AM EST | Luna C

On Thursday, Donald Trump threatened Toyota with a "big border tax" if the automaker will not manufacture cars meant for US consumption within the states. This is one of the latest in the series of taunts to car manufacturers and is considered the first time after Trump won the presidency that he has posed threats to a foreign company.

The one-billion-dollar Toyota plant is planned to be based in Guanajuato, Mexico, not in Baja California, as tweeted by Trump. Toyota has planned to increase their capacity in Tijuana, Baja California but this is for Tacoma pickup trucks, not US Corollas.

Toyota plans to produce around 200,000 Corollas in Mexico. Based on sales records, the Toyota Corolla is second to Honda Civic in the bestselling compact car category. Disrupting this plan could have a big impact to Toyota and the US car market in general.

Trump and General Motors

Trump has also threatened General Motors for planning to manufacture cars just south of the US border. A tweet from Jorge Guajardo, former Mexican ambassador to China, rebutted Trumps threats saying something about the US president being wrong on the idea that wrecking Mexico's economy will bring stability and peace to the United States.

Trump has spent the entire week ordering car makers to transfer their compact car production out from Mexico. This is the action to his promise in restoring US manufacturing jobs. On Tuesday, Trump told General Motors that the car manufacturer must also weigh oin his opinion in favoring against financial advantages offered by foreigners. His exact words are: "Make in U.S.A. or pay big border tax!".

In recent weeks, Trump had also posed threats to aerospace firms Lockheed-Martin and Boeing. Both companies rely mostly on government contracts which have billions of dollars for revenue. The threats are broadcasted on Trump's Twitter page and have shocked shareholders. In turn, stock prices are affected.

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