Trump plan for tax on Mexico exports raises eyebrows in Asia
ASSOCIATED PRESS
In this Wednesday file photo, a tug boat goes by the pier of a container terminal in Tokyo. Talk of a possible 20 percent tax on U.S. imports from Mexico is raising eyebrows in Asia, where exports to the U.S. drive growth in many economies. Japanese officials said today they hoped to soon hold talks on trade with U.S. officials.
TOKYO >> Talk of a possible 20 percent tax on U.S. imports from Mexico raised eyebrows Friday in Asia, where exports to the U.S. drive growth in many economies.
Reaction to the news was more muted than it might have been, however, since much of the region was closed for lunar new year holidays.
Japanese officials said Friday they hoped to meet soon with U.S. officials. Finance Minister Taro Aso said the Japanese side should “thoroughly explain” how Japanese companies have been contributing to American society, including creating jobs.
“It would be important to exchange opinions to accurately convey the reality and establish a steady relationship,” Aso told reporters.
President Donald Trump’s press secretary Sean Spicer said the 20 percent tax was among several options to finance building a wall along the U.S. southern border, but no decision has been made.
Mexican President Enrique Pena Nieto (PAYN’-yuh nee-EH’-toh) scrapped a 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.
The peso fell 0.6 percent against the U.S. dollar, to 21.35 pesos to the dollar but recovered to about 21.23 late Friday in Asia. The Japanese yen also weakened against the dollar, to 115.23 yen from Thursday’s close of 114.46 yen.
China’s official Xinhua News Agency reported that Trump was considering the 20 percent tariff without any editorial comment. However, the report cited unnamed analysts saying Trump would have to withdraw the U.S. from the North American Free Trade Agreement, or NAFTA, to be able to impose such a tax. Trump has said he wants to renegotiate NAFTA.
Though he did not refer directly to Trump, in remarks marking the eve of the lunar new year on Friday, Premier Li Keqiang said, “Above all, we remain convinced that economic openness serves everyone better, at home and abroad.
“The world is a community of shared destiny. It’s far preferable for countries to trade goods and services and bond through investment partnerships than to trade barbs and build barriers. Should differences arise, it behooves us all to discuss them with respect and a keen sense of equality,” he said.
Uncertainty over future trade ties with the U.S. rose after Trump pulled the U.S. out of a Pacific Rim trade initiative, the Trans-Pacific Partnership, that formed the centerpiece of former President Barack Obama’s moves to strengthen U.S. economic ties in the region.
It’s unclear how much of Trump’s campaign rhetoric will become reality, said Kent Calder, director of Asia Programs at Johns Hopkins School of Advanced International Studies.
“But the general symbolism that America is growing protectionist I think deeply concerns almost all Asian countries because they are pre-eminent exporters, and many of them heavily dependent on exports and so that has major implications for them, even if this is specifically aimed first of all at Mexico,” he said.
Japan’s chief government spokesman refused comment on tensions over the border wall, but said Tokyo was watching for any impact on Japanese companies.
A steep tariff on exports from Mexico to the U.S. would pinch manufacturers like Toyota Motor Corp., which like nearly all other automakers builds small cars in Mexico to take advantage of its lower wages.
Toyota employs thousands of people at factories in the U.S, but it also is planning to build a plant in Mexico to make the popular Corolla subcompact.
About 70 percent of the vehicles Japanese car makers sell in the U.S. are made in the U.S., but a tax on cars exported from Japan — 1.8 million last year — would “clearly be a major headwind,” Capital Economics’ economists Marcel Thieliant and Mark Williams said in a report issued Friday.
Trump also has threatened to impose steep tariffs on imports from China, which ran a $319 billion surplus with the U.S. in January-November 2016, compared with Japan’s $62.4 billion surplus and Mexico’s $60 billion, according to U.S. figures.
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Associated Press writers Ken Moritsugu and Mari Yamaguchi contributed to this report.
31 responses to “Trump plan for tax on Mexico exports raises eyebrows in Asia”
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Sounds like a plan.
I don’t know if it’s a good plan. If a Mexican worker can work cheaper than a USA worker, why should they be punished for that? Trump’s tariff’s will only increase prices, because taxes get passed to the consumer through higher prices.
I’m all for supporting USA workers, but let’s keep it fair.
Times are changing. Like TheDonald says, no longer will the US be on the short side of the Trade Deal. IMO, the US is “the” consumer of goods in the World and these foreign company’s want our business as we see our trade deficits with them.
It’s about time we make deals that will be more in America’s favor when possible. America 1st! We lose US factories and jobs to foreign countries we lose money not only in tax collection but pay unemployment and welfare checks. Tink People! Let’s tax imports to even the playing field to start the US rebuilding it’s workforce. These foreign entities needs the US for their own economic growth and look what China does with it’s exports bonanza! they build man-made military islands! Tink People, supply the demand and reap the profits
Americans don’t want to do things (jobs) and get paid Chinese wages. Walmart prices will go up. Lower income ppl will pay more for stuff. The trumpf tax will be taken from these imports, then the price passed on to the U.S.consumers. see how that works? The U.S.consumer will blame Walmart, but it’s All on Trumpf. AOT.
What? Deport the cheap illegal migrant and there will be jobs and increased wages. Companies will have to pay more to get workers on the job, consumers pay more but look at this in another view. Unemployed have jobs, better wages when employed, the unemployed will be less dependent on welfare/handouts if not at all, then you add in all the taxes collected from the workers pay check for the the US Government!
You only tink of the negatives and why one never wants to change even with our Country in Godzillions of debt!. It’s like going with the flow into the burning pit and not trying to climb out of it. Let’s Make America Great Again! Do something instead of taking it in the arse!
Pocho,stop licking Goo Aid. Those jobs illegals have, Americans will not take. Toilet scrubbers,maids,landscape,yeah trumpf will make those jobs available to
so what, better to have Americans on welfare/handouts staying home? Are all of cheap illegal migrant wages. Bro, these jobs will have higher wages because companies will have to get workers to do em. Tink outside of your safe space, lol.
The US unemployment rate is already low at 4.9% and forecasted to drop to 4.4% in 2017. Consumers that would be hurt from the rising prices would be the seniors on fixed incomes and that demographic trend is predicted to grow. “In 2050, the population aged 65 and over is projected to be 83.7 million, almost double its estimated population of 43.1 million in 2012.” https://www.census.gov/prod/2014pubs/p25-1140.pdf
I’m all for change, but these reactionary policy pronouncements by Trump do not make sense.
Tariffs raise the price of consumer goods. If we have tariffs on other countries they are not paying the american consumer is.
IMO,It’s all within the plan to bring back jobs to America, you cannot only tink of cheaper costs of goods for Americans to purchase today as we are experiencing our lost US jobs as companies are going overseas or borders to produce US consumer goods. What good is it with joblessness and having US citizens out of work and collecting Government handouts? That’s the track record for decades now! This is a new approach to level the playing field for US produced goods bought by US consumers. Give’s US citizen jobs and off of welfare/handouts and in turn creates more tax revenue for our Government. As it is today the theory is complete opposite of what Trump is trying to implement IMO.
Here’s the problem people with jobs are not in the shoes of people who have lost jobs, on welfare/handouts! They only see their view of the possibility on paying more for consumer goods and again not in the shoes of the unemployed.
There’s the other topic too that the Illegal Migrants crossing the border or those that overstay their visas takes jobs away from US citizens that are out of work. So what you could surmise this is all the changes needed to go with the complete plan to see the results of the Trump’s plan. Time for change the stagnant do nothin politicians only talk about to get our debt and economy going! The US was headed down the wrong economy path of destruction while letting the foreign countries REAP the profits from Americans buying their cheap goods.
I’m not a Rocket Science but understand what Trumps’ theory is and I don’t know how it’s gonna work out and we’ll never know if untried. You can have ALL the negative pundits political or business people taking of their views but all that said is not written in Stone. And the again it’s time to change the thinking, talking and doing something about the problems in America.
lol, sorry as I did not take the time to review the above post as to having errors in sentences and words used.
I admit my fault that Libertards and Democrats never do! Libertards will rattle of unto another point sidestepping their error and the Democrats will always blame everyone and everything but themselves.
That’s what really stood out in these elections as the DNC email wikileaks trully showed how deceitful that Party is. I bet the Republicans are just as bad but until we have those leaks I’ll hold my thoughts of them. lol
Here’s what happens if the idiot occupying the White House imposes (with or without congressional action) a 20% import tax (tariff) on all goods imported into the U.S.: The cost of nearly everything goes up by 20%. Since very few products Americans consume are made in America, that means that nearly every TV, computer, and cell phone, as well as everything Americans wear will cost 20% more. Inflation will set in; interest rates will skyrocket; the economy will tank. And, oh, yes, if we get into a trade war with Japan and China, the number of Japanese and Chinese tourists coming to Hawaii will plummet, which will devastate our economy. One last item: China controls nearly all the “rare metals” used in the manufacture of electronic and computer products.
No one in the Trump administration has any idea of the complexity of trade. We export a lot of things to Mexico to be assembled there and then re-imported back to us. Besides raising the cost of a lit of things, this will hammer the US heartland which exports to Mexico.
Companies were or are still leaving to manufacture goods across our borders! Whatever the US manufactured to sell overseas are being made outside of the US, lol. In time the US has nothin to export to foreign countries, what’s so hard to understand? In the end, imo, the US may have agricultural exports to sell but even then with the technology of genetics/cloning look what’s happened to Hawaii’s Sugar and Pineapple industry
We should tax them as much as they tax us.
i heard that mexico is going to go on full red one alert with their army, airforce and navy.
potus will activate the boy scouts to counter
auwe as wy hod
That’s the JV team. As long as Mexico not having wolves in sheeps clothing to do what ISIS follwers do in the US or around the Globe. Military in clothing are easier to fight than the wolf in sheeps clothing.
Here’s something to tink about. Mexico can’t even control their Drug King pins so why should we be afraid of the Government troops?
The way I see it, from what’s been reported Mexico protects their southern border very well because of the Central Americans migrants but yet could care less of their northern border! TheDonald will be handing Mexico it’s own Medicine! lol
Starting a trade war only hurts the consumers on both sides who ultimately pay the price.
lol, we all may have no choice but to witness how Trump’s economic plan will turn out to be. I’m glad to have a POTUS who ran his campaign with his agenda and got voted into office then is not doing what the voters knowingly voted fer!
the costs of the tariff will be passed on to the American consumer. So how is that having Mexico pay for the wall?
I don’t know how it words really. I would assume the Feds get to keep the tariffs. Guess what why would a US company manufacture overseas if the US consumer would pay for the same products produced in the US?
Piece the puzzle together! Gets US companies to produce in the US, gives US jobs, gets more taxed wages in return for the Feds, get’s people off welfare, etc.
It’s all for TheDonald’s economic plan for the US.
It’s all a win win situation! You’ve only seen your bottom line of goods cost and not the big picture or how this works.
TheDonald got this covered! He’s even stated he’ll make deals with foreign Countries one-on-one. Mexico could have a better trade deal of sorts paying for the Wall and come out ahead! It’s the Art of the Deal! It’s happening already, don’t you see/read American automakers already scrapping plans across the border and investing in plants in the States! The Economic tinking is a changing with TheDonald at the helm.
Um, what about his promise that Mexico will pay for the wall? So far I see Americans fronting the money to build it then pay ourselves back with our own money. So, where is Mexico’s payment? He is backtracking on his promise but for some reason your big picture ignores the bigger picture.
you look at it the opposite way and will never think of it the same way as I do. Import taxes on Mexico’s imports into the US are charged on Mexico’s companies that goes into the Fed’s pockets.
You decide if you want to buy the product or not! NO one is telling to buy an import product with the import taxes applied.
and ahhhh looks like you still believe what TheDonald states as a businessman that put together a lot of deals. He states he want’s the one-on-one trade deals with foreign countries. Who says, you’d have to buy the higher taxed and priced goods from Mexico, maybe Taiwan, India, or some other Country will get to have a better trade deal with Trump to keep our prices of imported goods down but I wouldn’t bet on that as TheDonald wants to have our manufacturers produce goods in the US. Now, you see he has options, it’s Business like he knows and puts America and Americans 1st! Look at the blanket deals have done to US jobs and our deficits! Somethings WRONG and it needs to be addressed where Barry just left us taxpayers doubled ours Nations debt for Trump to deal with.
Barry wanted no big trouble during his reign, did nothin for his Chicago, nothin with ISIS the jv team, nothin but his ACA failure, etc.
It’s extraordinarily expensive to make things in this country. Wages/benefits/working conditions all need to maintain a certain standard put forth by US law. Countries like China, Mexico, Thailand, Philippines, etc. do not have anywhere near these standards to maintain, thus their costs are drastically lower. Now imagine yourself as a business owner. Everything is about the bottom line; it’s your LIVELIHOOD. Ask yourself why you went into business. Is it for the greater good of the country? To provide decent, living wages and benefits to fellow Americans? Of course not, it’s to make money and hopefully become rich, therefore, everything revolves around reduction of COSTS, your bottom line. The fact is American businesses will only manufacture in this country if it fiscally serves their interests to. Even at a 20% import tax rate, it may still be worthwhile for them to manufacture overseas since they will just pass that 20% on to the consumer, particularly if their goods are in high-demand. No business in their right mind will eat that 20% tax for the “good of the nation”. It has been this way for decades. If you want to “buy American” chances are you won’t be able to; great example, your smartphone. Would you be able to live without that? Would you pay double or even triple for that same phone if it was 100% made in America? I doubt you would.
The jobs that illegal immigrants are taking are mostly jobs that no American wants or should even aspire to do. These are minimum wage jobs with no benefits that you cannot achieve the American Dream on. If Americans want the life their parents or grandparents have/had, they need to develop to skills applicable to what’s in demand and what will be in demand. “Good enough for my granddaddy is good enough for me” will no longer allow you to prosper and retire comfortably. Societies evolve and improve and that means competition gets tougher. American parents need to realize and accept this to successfully guide their children to develop and sharpen in-demand skills for today’s and tomorrow’s workforce.
I think the best venue is to negotiate free trade bi-laterally with each nation. Sure there is an imbalance, especially with Asia, hence the scrapping of TPP. The Mexico situation is using tariffs as leverage for Mexican-imposed border control, something they should be doing anyway.
ahhh yeah! The taxes and regulations that US companies had to deal with adds somewhat to why US companies left the US. Things are changing, example: US automakers reinvesting in it’s US plants, etc.
However, with China doing the lion’s share of the manufacturing and exporting, their economy is growing by leaps and bounds and their living standards are also getting much better. Their citizens by working even with cheap pay, are more productive and are learning and developing more skills. China has taken care of itself very nicely as can be seen from how spectacular the cities of Beijing and Shanghai are today. We can continue to be happy to buy foreign goods at cheap prices but we will always be the consumer and our deficit will keep increasing. But the low prices of even foreign goods won’t last forever. We need to bring back more manufacturing to our country so that we can be more self-sufficient. Having more jobs will increase productivity and improve work ethic.
So it’ll cost 20% more for a bottle of tequila. Whoop-de-doo.
Too much?
Quit drinking.
Bigger problem we face is right here with our local government wanting to tax the bejesus out of us to pay for the stupid rail.
Very few things are manufactured entirely in the U.S.. Take American cars. Do you think that a Chevrolet is made of entirely American parts? Most of the parts are made overseas. Look at the clothes you wear, the furniture in your living room, the food that you eat, even the toilet that you pee in. Most of it comes from overseas, either entirely or in part. First T says that he is going to get Mexico to pay for the wall. Now he realizes that won’t happen so he is proposing a stiff tariff to “pay for the wall.” Where is that 20% going to come from? From your and my pockets. So you now say you don’t care as we need to do that anyway? That may feel good for you to be so defiant but it won’t accomplish anything positive and will hurt hundreds of millions of people. What will it take before you face reality and admit that his ideas won’t work? This is all Economics 101. We even learned in high school social studies (you should have been paying attention) that protectionist tariffs don’t work. It has been tried over and over again throughout history and it ends up hurting our own country. This is a global economy today and we cannot go back. Our economy is going to tank and end up like North Korea.