Trump plan for tax on Mexico exports raises eyebrows in Asia

TOKYO (AP) – 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 Friday they hoped to soon hold talks on trade 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.
China’s official Xinhua News Agency reported that Trump was considering the 20 percent tariffs 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.
Japan’s chief government spokesman refused comment on the spat, but said Tokyo would watch for any impact on Japanese companies.
A steep tariff on exports from Mexico to the U.S. could have a chilling effect on manufacturers like Toyota Motor Corp., which like nearly 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 U.S. It also is planning to build a plant in Mexico to make the popular Corolla subcompact.
Opposition parties in Japan have lambasted Prime Minister Shinzo Abe over Trump’s decision to pull out of a Pacific Rim trade initiative, the Trans-Pacific Partnership, that former President Barack Obama had made the centerpiece of efforts to strengthen U.S. economic ties in the region.
Abe said Friday he believed Japan could work with the U.S. on a bilateral trade deal, the type of arrangement Trump says he prefers, while also pursuing wider trade arrangements like the TPP.
After Trumps announcement of the U.S. withdrawal from the TPP, Abe and leaders of some of the 11 remaining member countries said they hoped to push ahead on the trade pact and possibly to woo the U.S. back.