Toyota to Texas: Pump the brakes
Toyota executives threw the weight of the automaker’s vast Lone Star State presence behind a call on Texas’ congressional delegation — specifically, Sens. Ted Cruz and John Cornyn — to “apply the brakes to auto tariffs,” proposed by President Donald Trump.
Such taxes, “will hurt our employees and customers; stifle our investments and damage our state’s growing economy,” Chris Nielsen, Toyota Motor North America executive vice
president, wrote in a letter released to The Dallas Morning News on Monday.
In the letter, Nielsen underscored that the Japanbased auto giant recently moved its North American headquarters from California to a gleaming new Plano campus, where it now has 4,000 employees.
Taxes may cost jobs
He also cited Toyota’s large San Antonio truck factory as being a significant contributor to the 54,000 jobs the automaker supports in Texas, if you also count suppliers and dealers. Toyota, he wrote, has also invested almost $4 billion in the state.
But a steep new tax on imported cars and car parts could threaten all that, Nielsen wrote.
A 25 percent tax on imported vehicles and components would increase the cost of a San Antoniobuilt Toyota Tundra by at least $2,800, the letter said. Previously, Toyota said that the taxes would boost the cost of a Camry, built in Kentucky, by $1,800.
Nielsen’s letter comes ahead of a Thursday U.S. Department of Commerce hearing, where trade groups and some automakers will testify about the possible impacts of car import taxes.
Toyota will not formally testify at the hearing, but late last month, the company submitted comments to the department taking the Trump administration to task for justifying the proposed taxes on national security grounds.
Its thousands of American workers, the automaker said, are not a national security threat.
Analysts say the proposed tariffs would hit Toyota hardest among the world’s automakers.
Still, the proposed levies have been loudly opposed by a broad swath of auto industry groups and car manufacturers.
“Auto companies are united in their opposition, including General Motors which operates a major assembly plant in Arlington,” Nielsen wrote. “Like most global automakers, including Detroit-based companies, Toyota sources most key parts and components locally, but not all are available from U.S. suppliers.”
Trade and auto manufacturing experts have long said that few complex products - from electronics to cars - are made solely in one country.
The NAFTA-enabled movement of products back and forth across borders has allowed manufacturers to stay competitive on a global scale, experts have said. And Texas has the most at stake of any state when it comes to trade.
Stepping into politics
Trump, however, has made upending trade orthodoxy by heavily taxing imports from other countries a key part of his agenda.
Texas state politicians, including Gov. Greg Abbott, have come out against Trump’s other tariffs, including steel and aluminum import taxes that Toyota’s North American CEO Jim Lentz said earlier this year could add $400 to the cost of a car.
Lentz, Toyota’s Planobased chief executive, said in January that although the company has largely stayed out of state politics, that could change.
Last week, Cruz and Cornyn signed onto a nonbinding measure seeking to give lawmakers a bigger role in making tariff decisions.
“Texans know that preserving an open global market for our goods promotes commerce, creates jobs, and keeps prices low at home,” Cornyn said at the time.
On Monday, a spokesperson for Cruz declined to comment specifically on the new call to action from Toyota. Cornyn’s office did not immediately respond to a request for comment.