US import tariff risk is not a problem for Toyota in Mexico

Sometimes transnational companies take the long view; this may include concluding that the capricious nature of transient politicians can lead to policies which require management rather than a complete reversal of a previously laid out plan. Toyota is renowned for taking the long view and not being prepared to go along with prevailing orthodoxies. Although it is introducing electric vehicles (EVs), it has rigidly stuck with hybrids, including plug-ins, and also retains a strong belief that ICE vehicles powered by hydrogen could be viable in the long run. The slowdown in EV take-up in Europe and in much of the rest of the world suggest that Toyota may be right to try to remain technologically neutral for as long as possible.

Similarly, while vehicle manufacturers with major operations in Mexico worry about the scale of tariffs which might be levied on Mexican-made models once President Trump returns to the White House in January, Toyota has doubled down on its plans for producing more vehicles in Mexico. Time will tell whether this is wise or foolhardy and whether Trump’s bite is as bad as his bark in this area.