Proposed Auto Tariffs Would Hurt San Antonio and Texas

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Toyota Tundra manufacturing line in the Southside, San Antonio. Photo courtesy of Toyota Texas.

Courtesy / Toyota Texas

Team members at Toyota Motor Manufacturing Texas in South San Antonio built more than 267,000 Tundra and Tacoma trucks in 2017.

Toyota’s San Antonio plant has called Texas home for 15 years now. The 3,200 Toyota team members, who built more than 267,000 Toyota Tundra and Tacoma trucks last year, are an engine for economic growth across the state. We have invested $2.8 billion in our plant over our decade-and-a-half here.

We share our campus with 23 of our suppliers, together bringing more than 7,200 Team Texas jobs to San Antonio’s South Side. If you include direct employment, spinoff, and dealers in the state, Toyota’s footprint in Texas is more than 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.” Absurd as it sounds, the U.S. Commerce Department held hearings on July 19-20 in Washington, D.C. as part of its investigation to determine the so-called threat. Ironically, trucks built by Toyota Motor Manufacturing Texas (TMMTX) are among the vehicles Toyota exports to 31 countries.

Toyota has 137,000 employees and operates 10 plants in the United States. We are an exemplar of our nation’s manufacturing might. 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.

Like most global automakers, including Detroit-based companies, Toyota sources most key parts and components locally, but also imports certain specialized parts and components. No vehicle in the U.S., whether from Toyota, General Motors, Ford, or Hyundai, is sole-sourced from exclusively American parts and components.

Even though we assemble all the Tundras on U.S. roads right here in San Antonio, we still need imported parts. In short, a 25 percent tariff will increase the cost of each vehicle that rolls off our assembly line.

Ours is a global industry. In 2017 alone, 12 domestic and international automakers manufactured nearly 12 million new vehicles in the U.S. Meanwhile, this same industry imported $183.8 billion in passenger cars, SUVs, and minivans and $26.4 billion in trucks — the clear majority from the U.S.’ national security allies, including Canada, the European Union, Japan, Korea, and Mexico. This is true for Toyota but it is also true for the Detroit-based automakers.

According to Ward’s Auto, 51 percent of the vehicles Fiat Chrysler Automobiles sold in the U.S. in 2017 were imported. GM imported 37 percent and Ford Imported 21 percent.

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. Increased import tariffs on vehicles and components will increase product costs, lead to higher prices for consumers and a decline in sales, auto production, jobs, and vehicle exports.

Engaging in trade wars with our allies would diminish, not enhance, U.S. national security, jobs, and prosperity, and undermine the rules-based global trading system, which has led to a period of unparalleled peace and prosperity in Europe and Asia for the last half-century

And as we’ve seen recently, erecting trade barriers, like more import tariffs, will ultimately invite retaliation from other nations and undermine global competitiveness. Like others in the auto industry, we believe that government tariffs now in effect, or that are being proposed, will ultimately hurt consumers.

Toyota stands ready to work with the Trump administration to advance opportunities that remove such barriers and promote economic growth.

We urge members of the Texas delegation, including U.S. Sens. Ted Cruz and John Cornyn, to oppose this misguided idea and apply the brakes to auto tariffs.

They would hurt our 7,200 Team Texas team members, our plant, and our state.

7 thoughts on “Proposed Auto Tariffs Would Hurt San Antonio and Texas

  1. Aren’t we all getting poorer when there is a trade imbalance? The trade deficit must be offset with a balance of payments which the U.S. government performs by borrowing. The debt is ever growing and must be maintained with interest. This article is only looking at the temporary micro economic imbalance that occurs when a needed correction is implemented. Long term large trade deficits have the insidious effect of reducing wealth of a nation and it’s citizens; except for that fractional 1% who gain from outsourcing production to China, etc. The true economic pain hasn’t been realized since imported consumer good prices are artificially suppressed through currency manipulation. The end game comes when a nation can not pay when debts are called. President Trump is doing exactly what is needed for the citizens of America now and into the future. It’s a long term strategy that if followed by future administrations, will lead to prosperity, economic growth, and stability of the United States.

  2. Thank you Juan. Good comment explanation on economics. This President, Donald Trump, has tasked and is accomplishing every campaign promise he made. We WILL be a great America again, if we let him conduct affairs in his negotiation style. We all have to suffer for awhile to gain something for the future like childrens education. As long as this earth remains, history will repeat, afterall, Jesus Christ suffered a lifetime for our future.

    We all know and cringe at Trump’s philandering past, but if he had been a poor man, this would not have happened because no playboy bunny or porn star would have pursued him. But let’s concentrate on what is best for our beloved nation of freedom. If you disagree, we can probably get a “go fund me” started for one way tickets to any other nation of your choice!

  3. “unparalleled peace and prosperity in Europe and Asia for the last half-century.” Pablum like this serves no purpose and is wholly misleading. And what about the US? Don’t we count?

  4. Yes, any prosperity, so not unparalled, has been at the expense of the US!! And peace?, dont know which bomb shelter you’ve been hiding under. The US has historically been the most powerful and wealthiest country! Why do you think immigrants came here, and still do – even illegally! What exactly do you mean by “pablum serves no purpose and wholly misleading……”? Do we need a go fund me site for you for a one way ticket to Europe or Asia,?

    • I was suggesting the writer was throwing in a high-sounding phrase divorced from reality. In the last 50 years there have been armed conflicts in Asia from Timor to Cambodia nd Myanmar and Afghanistan. Even now China is sabre rattling over Taiwan and building fortified islands to contest intl waterways. Europe has seen war in Cyprus, Kosovo, And Chechnya. England fought a war over the Falklands. Hardly peaceful.

  5. Anna wrote …
    “We WILL be a great America again, if we let him conduct affairs in his negotiation style” … and … “We all know and cringe at Trump’s philandering past …”

    Oh my gosh!!!! “Negotiation Style”???? WHAT???!! He is a NY real estate developer and NOT presidential. He is weakening our democracy. America was ALWAYS great but heaven knows what will become of us with Trump in the White House!!!! Who he philanders with isn’t important. That is his private life and there have been presidents before him who were philanderers. Philandering is NOT the most important issue. I personally am concerned with cyber warfare against the United States and what on earth frightening thing it is that Putin is holding over Trump’s head. Trump could ruin all of us with his lunacy, not to mention his $12M bailout to farmers being hurt as a result of Trump’s tariffs. Why doesn’t Trump just pay that out of his own pocket?!!! Rather, it is costing each taxpayer $95 and I’m not ok with that. As a real estate developer, Trump defaulted on so many loans, and gone bankrupt so many times, no one in this country would loan more money to him for his “projects” so he had to resort to loans (more than $400M) from Eastern Europe and other murky sources with ties to organized crime, as money laundering schemes. Good reasons why Trump doesn’t want his tax records seen because those records would reveal sensitive information about his business activities, conflicts of interest and financial pressures that might come to bear upon him in the White House – from places like Russia. No doubt Putin has information about Trump’s finances that Trump would rather keep under wraps. Trump’s finances could touch on national security. I am VERY worried about *that*!

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