Japanese companies with operations in Mexico are on high alert for what protectionist measures U.S. President-elect Donald Trump might have in store for the neighbor to the south.
Japanese automakers and parts suppliers have established production hubs there to take advantage of the North American Free Trade Agreement, which provides for duty-free exports to the U.S. Nissan Motor builds some 800,000 vehicles a year in Mexico.
Such companies will have to overhaul their North American strategies should Trump try to keep his campaign promise of renegotiating or withdrawing from NAFTA.
Bearings maker NSK is also in wait-and-see mode. “We prefer to keep close watch until [Trump’s] cabinet positions are filled,” Executive Vice President Saimon Nogami has said.
There were 957 Japanese companies in Mexico as of October 2015. The tally was up 20% from a year earlier as enterprises were drawn to the nation’s wealth of workers, low labor costs, and proximity to the U.S. market. But now, Trump’s electoral victory threatens the supply chain.