News
Japanese automaker Toyota Motor Corp. has outlined a plan to invest $10 billion in U.S. auto plants.
On Tuesday, the U.S. government released a document detailing an investment framework between Japan and the United States.
The factsheet contained plans for several major investment projects with a total value of up to $400 billion, including a $10 billion pledge to build auto plants “all over” the United States.
The statement said:
“Toyota plans to export its U.S.-made vehicles to Japan and open its distribution platform in Japan to U.S. automakers, as a result of Japan’s commitment to accept for sale in Japan U.S.-manufactured and U.S. safety-certified vehicles without additional testing.”
The decision follows talks between Prime Minister Sanae Takaichi and U.S. President Donald Trump in Tokyo on Tuesday.
The investment framework represents the U.S.’s latest effort to reduce its trade deficit.
Japan’s decision to expand opportunities for American exports has been praised by analysts and by Japan’s Ministry of Economy, Trade and Industry, which celebrated it as a pragmatic step to quell trade tensions between the two nations.
During his trip to Asia, Donald Trump urged American troops to buy cars from the Japanese automaker – a radical walk-back of his “America First” stance.
According to the Japan Automobile Manufacturers Association, Japan sold over 1.37 million vehicles to the U.S. last year alone, making automobiles Japan’s largest export to the U.S. In contrast, American models have been harder to sell; Japan imported fewer than 17,000 American cars last year, according to the Japan Automobile Importers Association.
This lack of uptake could be due to several factors, including the larger size of American vehicles, which makes them less suitable for Japan’s narrower roads, and the fact that American cars have left-hand steering.
Toyota’s investment in U.S. auto plants marks a closer alliance between the two nations’ automotive industries. Despite her short time in office, Japanese Prime Minister Sanae Takaichi has demonstrated a strong commitment to bolstering trade relations between the U.S. and Japan.
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