Japan Automakers in Mexico Face Hit from Trump Tariffs

On March 26, 2025, US President Donald Trump announced the imposition of a 25% tariff on all imported cars from April 2. The business research firm Teikoku Databank noted that this would lead to a huge increase in costs for Japanese auto companies exporting to the United States from either Mexico or Japan, which could lead to reduced sales if the higher prices are passed on to consumers. It would also hit smaller companies supplying parts, as well as those in other industries like steel, semiconductors, and machine tools.

As of March 2025, there were 746 Japanese companies in all sectors with operations in Mexico. This is up 31 from the last time the organization conducted such a survey in July 2018 during the first Trump administration, as 163 firms began operations and 132 withdrew or could not be confirmed.

Companies involved in the auto industry (excluding makers of buses and trucks) represent 65.3% of the total, with 487 firms, including 8 manufacturers of completed cars and their supply chains.

Many of the companies are suppliers for Toyota, Honda, Nissan, and Mazda, which produce cars in Mexico for sale to the US market. At 404 firms, more than half of the overall total supply parts to Toyota (including those supplying to other companies too).

Of the 746 companies, 308 have factories or manufacturing facilities in Mexico. At 244, just over half of the 487 auto industry firms have such locations, while this is true for 217 (62.2%) of the 349 auto companies specifically in the manufacturing sector.

(Translated from Japanese. Banner photo: A Toyota automobile factory in Mexico. © Reuters.)