A quarter of Japanese manufacturers operating in the U.S. and Mexico plan to expand production in Mexico, and the percentage was down by half from before the Trump administration came to office, a recent survey showed. Various factors are said to be behind this reduction, including President Trump’s call for investment in the U.S. and renegotiations of the North American Free Trade Agreement (NAFTA).
The survey was conducted by the Japan External Trade Organization (JETRO) from October to November 2017 and covered 793 firms that have production and marketing bases in the U.S. The previous survey was done amid the presidential campaign from September to October 2016.
Of those manufacturing U.S.-bound products in Mexico, 25% or 29 firms said that they will “expand” their production down the road. In the previous survey, 57.1% (68 firms) gave a similar response. On the other hand, those who said “will downsize production” doubled to 5.2% from 2.5% two years ago. Those who answered “maintain at the current level” came to 69.8%.
Asked about areas to be affected by the review of the NAFTA among the U.S., Canada and Mexico, 68.3% said “customs, trade facilitation and rules of origin.”