Asia Minute: Tariffs on Mexico Would Hurt Asian Companies
President Trump’s threat of tariffs on goods coming from Mexico has disrupted financial markets. And while the move would impact the earnings of a number of U.S. companies, it’s also a concern in Asia.
Over the last several years, Mexico has become one of the top destinations in the world for auto production. Autos and auto parts are the biggest imports from Mexico to the United States — more than 93-billion dollars last year according to the U.S. government.
The brands are familiar to global consumers. General Motors builds the most cars in Mexico –more than 834,000 vehicles last year. Number two is Nissan, more than 763,000 last year.
Honda, Toyota and Mazda all have significant manufacturing presences in Mexico, and Japanese automakers combined to produce about 1.25 million vehicles in Mexico last year.
The history of a lot of those investments goes back to the early days of the North American Free Trade Agreement.
Korean automakers also produce in Mexico — Hyundai and Kia are there.
And it’s not just cars.
LG Electronics makes refrigerators in Mexico, and televisions, most of which make their way north to the United States.
As for corporate Japan, Kyodo News quotes figures from credit research firm Teikoku Databank as saying that more than 700 Japanese companies were operating in Mexico as of last June.
And if these tariffs do go through, any exports from those companies headed to the United States will have an additional cost attached.