Trump's latest tariff threats can collide with global companies

The Mexico pitch to companies in consideration of the US market was easy. Are you worried about a vulnerable supply chain? Is it necessary to reduce dependence on China? Do you want a cheap place near the United States with good trade rules? Please try Mexico.

Thousands of companies, from family companies to great power brands, Asia, and Europe, have been doing it in recent years. Adidas, Samsung, Honda, Hyundai, Nesle, Volkswagen, Volvo, Lego, and other Mexico industrial housing.

The parade has grown following pandemic -related supply chain nightmares and political tensions between the United States and China. The main partners of Canada -North American production networks -are also benefiting. Last year, Honda announced plans to invest about $ 11 billion on the new electric vehicles and battery production plants in Ontario, along with existing facilities. Toyota and Volvo also have plants in Canada.

But now, since Saturdays hit a company like an unusual ice storm in the summer, it is a threat to President Trump to impose 25 % tariffs on all imports from Mexico and Canada as soon as possible.

“If you are an investor sitting in the C suite, how to decide where to spend money?” Ta.

President Trump himself signed a new trade agreement between Mexico and Canada during his first term in 2020. Now, he is virtually torn the contract.

Lovely said that the trade agreement aimed at creating a “safe space” for long -term investment.

Mr. Trump also said that it will impose a new 10 % tariff on all imports from China from Saturday.

So far, other Asian and European trade partners have escaped the first round of Presidential Trade.

However, they must conclude for unexpected radioactive drops from tariffs that have been flattened by Mexico and Canada.

In Japan alone, more than 1,300 companies are operating in Mexico, and more than half of them are in the manufacturing department. A car supplier, who shifted production from China during the first term of Trump, began a trade war with Beijing. In November, Toyota in Japan stated that it would invest 1.450 million dollars in two Mexican plants.

More factories are ongoing. In October, FoxConn, a major electronic device in Taiwan, announced a plan to build a major order in Mexico to produce NVIDIA chips.

Albert Park, the chief economist of Asian Development Bank, states:

In Honda, when Mr. Trump warns about products from Mexico, not only in Mexico, where Honda operates a car factory in Seraya, but also from Canada, executives say they are distrustful. 。

Mexico is the largest exporter in US automotive parts. For example, Honda produces about 200,000 vehicles in Mexico, of which about 160,000 vehicles are shipped to the United States. American automakers such as General Motors and Ford Motors, which have major plants in Mexico and Canada, are similarly affected by tariffs.

At a press conference in November, Aoyama SHINJI, an executive vice president of Honda, said that long -term tariffs would be difficult. “Can companies actually stop producing in Mexico?” “It's really difficult.”

Mexico has other major manufacturers that manufacture aerospace, electronic devices, and home appliances. This is the largest export country of medical devices to the United States.

Hundreds of Chinese companies, including Electronics Maker Lenovo and automaker sherry, have also moved to Mexico in the hope of avoiding tariffs. BYD, a major Chinese electric vehicle company, is scouting domestic production sites.

All of these companies need to compete with additional obligations on components imported from China, whether they are from Asia, Europe and the United States.

Mr. Trump said that recent tariff threats aimed to help the immigration and Fentanyl flow. However, the long -term goal is to put pressure on companies to build many plants, not near the US coast.

“Please make your product in the United States,” said Mr. Trump this month in a speech broadcast on the World Economic Forum. If not, “You have to pay the tariff very simply.”

Many companies are already doing it. Some responded to threatened tariffs. Others change in trade patterns.

Last year, RECKITT, a British company, quoted Logjams on the decision to shift the production of Mucinex. It sells top -sales drugs in the United States from Mexico and the United Kingdom to North Carolina. After the pandemic confused the cold and influenza season, the company wanted the company to get more faster on the shelves of the store.

Denmark's Lego, the world's largest Toy Mark, has the largest factory site in Mexico. In 2022, we announced a plan to build a facility in Virginia. Lego said that the reason was to shorten the supply chain and approach the east coast transport hub.

In 2017, Toyota promised to invest $ 10 billion in the United States for more than five years, shortly after Trump threatened to issue tariffs on the company during his first term. Toyota has built a battery manufacturing facility in North Carolina, and in 2021, a vehicle factory was opened in Alabama and operated in Mazda.

Trump's latest threat is that companies are encouraging their options. Among them are two Korean electronic devices giants.

LG Electronics and Samsung Electronics are considering relocating a part of home appliances to the United States, according to local media reports. (The spokesman of the two companies rejected the comments.)

Mazda, who sends about 70 % of the vehicles made in Mexico to the United States, said that some of the production could shift to the Alabama factory in collaboration with Toyota.

However, for many companies, it is unrealistic to move most of the production to the United States, saying, Agate Demarayse, a senior policy fellow of the European Diplomatic Council.

The cost is too high. American workers do not accept low -wages that companies first move to a country like Mexico.

Mazda and Toyota are already struggling to strengthen their production at a joint factory in the United States due to lack of workers.

Recently, Demaris said that large companies could stay under the radar and do their best to wait for Trump's term. Opening a major production facility takes billions of dollars and a lot of time.

And if the policy is so unpredictable, business leaders may be wary of investing in the United States. For example, last week, the president raised the possibility of doubling taxes to foreigners and companies.

More importantly, according to Demeres, companies have more and more global commercials, mainly on trade routes that reflect the growth rivalry between the United States and China, as in areas involving Mexico and Canada. It is recognized that it is organized.

“It's a structural tendency to last long Trump,” she said.

MeaGhan Tobin has contributed to the report from Taipei in Taiwan.