Making the Case Against Import Tariffs

Toyota’s manufacturing executives argue that a possible 25 percent tariff on imported vehicles and automotive parts will hurt, not help, America and its economy

July 24, 2018

Taking Action -- Team members representing Toyota's North American manufacturing plants traveled to the nation's capital recently to express their views on the Trump Administration's proposed 25 percent tariff on imported vehicles and auto parts.

In May, the Commerce Department — at the direction of President Trump — launched an investigation into imported automobiles and automotive parts. The administration has threatened to impose a tariff of 25 percent on these products if the investigation determines that such imports pose a threat to America’s national security.
 
Among many potential repercussions, this tariff would increase the price of a Camry by an estimated $1,800 — even though the best-selling sedan is assembled in Kentucky and the vast majority of its parts are made by U.S.-based suppliers. Meanwhile, economic analysts predict the price of an average $30,000 imported vehicle would skyrocket by roughly $6,400.
 
Clearly, this “sticker shock” would put a damper on sales. Reduced sales would force automakers to cut production.
 
Not surprisingly, Toyota — as well virtually every other import and domestic automaker — has come out strongly against this tariff threat during the investigation’s period for public comment. Included in the chorus of dissent have been executives who head up Toyota’s North American manufacturing operations.
 
What follows are highlights of these executives’ remarks with links to their full arguments against the proposed tariffs:



Susan Elkington
President, TMMK
 
Toyota established its first U.S. manufacturing facility in Kentucky more than 30 years ago and it has since grown into the company’s largest such plant in the world. Its 8,000 team members can produce 550,000 vehicles and 650,000 engines annually. Currently, TMMK is in the midst of a $1.6 billion investment to modernize and expand production.
 
The proposed tariffs threaten these gains.
 
“We want to thank Senate Majority Leader Mitch McConnell, Sen. Rand Paul, Rep. Andy Barr and other members of Kentucky’s delegation for their support on this issue,” says Elkington. “Congress must oppose this misguided idea and apply the brakes to auto tariffs. They would hurt our plant and our state.”
 
Click here to read the full text of Elkington’s comments.



Sean Suggs
President, TMMMS

 

Since 2011, Toyota’s Blue Springs plant and its 1,500 team members have become part of the cultural and economic fabric of Mississippi, investing more than $1.2 billion in the local economy. Each year, it builds 170,000 Corollas, the best-selling vehicle on the planet.

Across Mississippi, TMMMS generates nearly 6,700 jobs though a network of 40 parts and materials suppliers as well as dealers. More recently, an additional $170 million was invested to build the 12th generation Corolla.

These accomplishments are being overshadowed by the government’s threat to impose a 25-percent tariff on imported vehicles and component parts because they potentially pose a threat to national security.

"Absurd as it sounds, the U.S. Commerce Department held hearings this week in Washington as part of its investigation to determine this so-called threat," says Suggs. "Ironically, TMMMS-built Corolla is among the vehicles that Toyota exports to 31 countries."

Click here to read the full text of Suggs’ comments.




Leah Curry
President, TMMWV
 
Curry refers to TMMWV as, “the little engine plant that could.” Its 1,600 team members churn out nearly 1 million engines and transmissions each year. Counting direct and indirect employment, this economic activity accounts for 5,000 jobs and an investment of $1.4 billion throughout West Virginia.
 
“Even though we assemble engines and transmissions for most of Toyota’s U.S.-built vehicles, we still need imported parts,” says Curry. “A 25 percent tariff will increase the cost of every engine and transmission that rolls off our assembly line.”
 
Click here to read the full text of Curry’s comments.
 



David Fernandes
President, TMMAL
 
With four expansions and a total investment of $1 billion since 2003, Fernandes notes that 1,400 Alabamians now produce nearly 700,000 engines each year at TMMAL. And starting in 2021, another 4,000 team members will begin assembling 300,000 vehicles at Mazda-Toyota Manufacturing, the new joint-venture plant in Huntsville. Once complete, that facility will represent a combined investment of $2.6 billion and generate over 5,000 jobs.
 
The proposed tariff, Fernandes says, could disrupt that momentum.
 
“Toyota and Alabama represent a strong partnership - the kind that results in high-paying jobs, economic advancements and lasting community support that will continue to help us move forward,” he says. “We urge Congress, including Alabama Senators Richard Shelby and Doug Jones, to bring some common sense to this issue and apply the brakes to auto tariffs.”
 
Click here to read the full text of Fernandes’ comments.



Millie Marshall
President, TMMI
 

Indiana has been home to Toyota’s Princeton plant for over 20 years. In that time, we have become part of the cultural and economic fabric of the state.  This is where our 5,400 team members build three of Toyota’s most popular vehicles—Highlander, Sienna and Sequoia. We make more than 400,000 vehicles a year and over 5 million vehicles since we started production. When you count supplier and indirect jobs, we account for 27,500 jobs and a total investment of $4.3 billion.

Ironically, TMMI-built vehicles are among those that Toyota exports to 31 countries. TMMI also has the distinction of being one of a only a handful of plants in the U.S. that builds right-hand-drive vehicles.
Toyota operates 10 plants and has 137,000 people working throughout the U.S. We are an exemplar of the manufacturing might of America.  A 25 percent tariff on automotive imports, which is really just a tax on consumers, would increase the cost of every vehicle sold in the country, not just those sold by Toyota.

We urge Indiana’s congressional delegation, including Senator Joe Donnelly and Senator Todd Young, to oppose this misguided idea and apply the brakes to auto tariffs. They would hurt our plant and our state.

Click here to read the full text of Marshall's comments.



Kevin Voelkel

Senior Vice President, TMMTX
 
Voelkel notes that Toyota’s truck plant has called the Lone Star State its home for more than 15 years. It represents an investment of $2.8 billion, employs 3,200 team members and — just in 2017 — produced 267,000 Tundras and Tacomas.
 
But TMMTX’s positive impact on the local economy is actually even greater than that.
 
“We share our campus with 23 of our suppliers, together bringing more than 7,200 Team Texas jobs to the Southside of San Antonio,” says Voelkel. “If you include the direct, spinoff and dealers in the state, Toyota’s footprint in Texas is over 50,000 jobs strong.”
 
“These accomplishments are being overshadowed by the government’s threat to impose a 25 percent tariff on imported vehicles and component parts because they potentially pose a ‘threat to national security,’” he adds. “Free and fair trade is the best way to create sustained growth for the auto industry and provide more choice and greater value for consumers.
 
Click here to read the full text of Voelkel’s comments.



Chris Nielsen

Executive Vice President and Chief Quality Officer, TMNA
 
Nielsen threw the weight of the Toyota’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,” says Nielsen.
 
Click here to read the Dallas Morning News’ report on Nielsen’s comments.
 
The government is expected to decide later this year on whether to impose tariffs.
 
In addition, team members from the plants traveled to Washington, D.C. to express their views on this issue. Check out what they had to say. 

 

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