Automakers including Mazda Motor Corp. and countries led by Mexico should buckle up: their car businesses could be in for a bumpy ride, thanks to U.S. President Donald Trump.
Trump instructed his Commerce Secretary Wilbur Ross to consider conducting an investigation into whether auto imports are weakening the American economy and may impair national security. The Commerce Department said shortly after the White House’s statement issued late Wednesday that it’s beginning the probe.
Among the world’s carmakers, Mazda, Tata Motors Ltd.’s Jaguar Land Rover unit and Mitsubishi Motors Corp. would be hit hard. All vehicles that the companies sell in the U.S. are imported.
Shares of Mazda fell as much as 4.4 percent in Tokyo, the biggest intraday drop in more than three months. Mitsubishi Motors fell as much as 4 percent and Subaru Corp. declined as much as 3.4 percent.
Volkswagen AG and BMW AG also ship a majority of the cars and trucks they deliver to American consumers into the country from overseas plants. Ford Motor Co., Honda Motor Co., and General Motors Co., on the other hand, produce substantial majorities of the vehicles they sell in the U.S. at domestic factories. Tesla Inc. would be completely unaffected, since the electric-car maker builds all of its models in California.
The Trump request met with immediate criticism from industry bodies spanning manufacturers and dealers, saying protectionist measures would hurt consumers by limiting car supply and pushing up prices.
“To our knowledge, no one is asking for this protection,” said John Bozzella, CEO of the trade group Global Automakers, whose members include Honda, Nissan Motor Co. and Hyundai Motor Co. “This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”
Mazda spokesman Yoshikazu Nagai declined to comment on the U.S. probe. “Mazda is constantly monitoring the situation and trading conditions in the countries where we do business, taking a long-term, global point of view,” he said.
Mitsubishi Motors said in an emailed statement the U.S. is an important market for the company and that it continues to monitor the situation. Subaru, which makes about half of the cars it sells in the U.S. locally, and Nissan also declined to comment. Toyota Motor Corp. will monitor the situation, said spokeswoman Akiko Kita.
“Tariffs are taxes,” said Cody Lusk, president of the American International Automobile Dealers Association, which represents 9,600 franchises that employ 577,000 American workers. “To treat auto imports like a national security threat would be a self-inflicted economic disaster for American consumers, dealers, and dealership employees.”