Courtesy / Toyota Texas
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.