Toyota shares dropped more than three percent Friday after US President-elect Donald Trumph threatened the carmaker with import taxes over a new vehicle plant in Mexico, also prompting an objection from the Japanese government.
Other automakers also sagged, with Nissan declining 1.79 percent to 1,178 yen and Honda down 1.54 percent to 3,514 yen by the break.
Shares in the Japanese automaker fell as much as 3.11 percent after the opening bell before paring losses to move 2.04 percent lower at 6,905 yen at the break.
Seko stressed the need for the new US administration to understand that the Japanese auto industry “has greatly contributed to the US economy” in comments to reporters.
Toyota became the latest company to face Trump’s wrath when he tweeted “NO WAY” to the firm’s plans for a new manufacturing plant in Mexico.
Referring to the statement, Japanese trade minister Hiroshige Seko said Japanese auto industry have “contributed to (creating) 1.5 million jobs in the United States.”
Trump — who takes office on January 20 — campaigned in part on bringing manufacturing jobs back to America’s heartland and vowing to address alleged unfair trade practices he said have hurt the US.
“Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax,” Trump said.
Toyota has said it will build a new plant in another region in Mexico, which is expected to begin production in 2019.
As well as the Trump salvo, Toyota shares were also under pressure as exporters across the board were hit with a fall in the dollar against the yen, which can damage their profitability.
Toyota already has a factory in Mexico’s Baja California state that borders the United States, making Tacoma pickups. Trump mistakenly said in the tweet that a Corolla plant would be built in Baja.