US president Donald Trump’s thought of a possible 20 per cent tax on US imports from Mexico is raising eyebrows in Asia where exports to the US drive growth in many economies. Japanese officials are of the say that they hoped to hold talks on trade with US officials soon. Finance Minister Taro Aso said the Japanese side should thoroughly explain how Japanese companies have been contributing to American society, including creating jobs.
Trump's press secretary Sean Spicer said the 20 per cent tax was among several options to finance building a wall along the US southern border, but no decision has yet been taken. In the light of the event, Mexican President Enrique Pena Nieto has scrapped his scheduled trip to Washington next week over the issue. He has flatly rejected Trump's assertion that Mexico will pay for the wall on its border.
China's official Xinhua News Agency reported that Trump was considering the 20 per cent tariffs without any editorial comment. However, the report cited unnamed analysts saying Trump would have to withdraw the US from the North American Free Trade Agreement or Nafta, to be able to impose such a tax. Mr Trump has said he wants to renegotiate Nafta.
A steep tariff on exports from Mexico to the US may have a telling effect on manufacturers like Toyota Motor Corp, which like almost all other automakers builds small cars in Mexico to take advantage of its lower wages. Along with other Japanese automakers, Toyota employs thousands of people at factories in the US. It also is planning to build a plant in Mexico to make the popular Corolla sub compact.