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Japanese automakers welcome North American trade deal, fear what's next

TOKYO — Toyota, Nissan and Mazda welcomed on Tuesday the revised North America trade deal that left Japanese automakers unscathed, but they may face a bumpy ride when Washington and Tokyo hold new talks on over $40 billion of annual U.S. auto imports from Japan. The United States and Canada reached an agreement on Sunday to update the 1994 North American Free Trade Agreement after Washington had forged a separate trade deal with Mexico in August. The updated deal effectively maintains the auto industry's current footprint in North America, and spares Canada and Mexico from the prospect of U.S. national security tariffs on their vehicles. Mazda, which ships cars to the United States from Mexico and Japan, called the deal a "big step forward". Nissan, which makes the cars it sells in the United States locally as well as in Mexico, Japan and other countries, said it was "encouraged" by the agreement. Toyota, Japan's biggest automaker, said it was "pleased" that a basic deal was reached. Other automakers were not immediately available for comment. While the deal has removed the risk that the disintegration of the pact would have posed to automakers, bigger risks loom large for Japanese firms as a chunk of the roughly 7 million cars they sold in the U.S. last year were shipped from Japan, and a trade deal between Washington and Tokyo has yet to be agreed. The United States and Japan last week agreed to begin fresh trade talks, with U.S. President Donald Trump seeking to address Japan's $69 billion trade surplus, of which nearly two-thirds comes from auto exports. Washington is also investigating the possibility of slapping 25 percent tariffs on auto imports on national security grounds, although it has agreed with Japan to put any new tariffs on hold during the talks. Analysts say the United States may take a tougher stance on auto imports from Japan than from its neighbors. "If Japan requests an exemption from the 25 percent tariffs under consideration, Washington could propose a more strict cap on imports than it agreed to with Mexico and Canada," said Koji Endo, senior analyst at SBI Securities. "That would be a risk." This could be a big blow to Japan, as the United States is a key source of revenue for Japanese automakers including Toyota, Nissan and Honda. The U.S. market accounts for a quarter or more of their annual global vehicle sales, and of their total U.S.

Mitsubishi ending US production

Mitsubishi is closing the doors on its US production as part of a "strategic move," Japan's Nikkei news service reports. According to Automotive News, the company declined to comment on the factory, and instead said it had "no plans to stop selling" vehicles in the United States. That's not what we asked, folks. According to the Nikkei news, the company is in the process of finding a buyer for is Normal, IL factory, which it opened as part of a joint venture with Chrysler back in 1988. The facility currently employs 918 UAW workers, whose jobs Mitsubishi is attempting to save as part of its negotiations with labor reps. The Normal plant is the only Japanese production facility with UAW representation, Automotive News reports. Normal is responsible for production of the Outlander Sport, building nearly 70,000 examples last year. Production is continuing on, according to the vice president for the local UAW Local, Kyle Young. "We haven't heard anything," Young told AN in a phone interview. "We're supposed to have negotiations coming up" in August. It's not clear how much the Mitsubishi will be selling the Normal plant for, nor is it clear if any parties are interested in picking up the facility, which contributes around $120 million to the local economy each year.

Nissan To Buy Mitsubishi For $2.2B | Autoblog Minute

Nissan confirmed this week that it would take a controlling interest in troubled Japanese automaker Mitsubishi. Nissan will buy 34% of Mitsubishi for $2.2B. Mitsubishi Nissan Autoblog Minute Videos Original Video