Toyota Pushes Back On Trump’s Claims: No ‘Explicit’ Promise Was Made About $10B US Investment

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  • The U.S. president has wrapped up his state visit to Japan before heading to South Korea.
  • The US-Japan trade deal, clinched in September, provided for Japan investing $550 billion in the U.S. in return for a reduced tariff rate of 15%.
  •  Toyota’s U.S. sales climbed 14%, outpacing the global sales growth of 3%. 

A Toyota Motor Corp. (TM) executive reportedly denied President Donald Trump’s claims that the Japanese automaker had committed to investing $10 billion in the United States.

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The U.S. president has wrapped up his state visit to Japan before heading to South Korea to attend the Asia-Pacific Economic Cooperation (APEC) summit, where he is expected to meet with his Chinese counterpart, Xi Jinping.

U.S.-listed Toyota shares have gained about 11% so far this year.

Toyota’s Rebuttal 

Speaking on the sidelines of the Japan Mobility Show in Tokyo, Toyota executive Hiroyuki Ueda said no explicit promise of an investment of that size was made, Reuters reported. The U.S. is the company’s single largest market, accounting for roughly 25%-30% of total sales.

According to a Wall Street Journal report, Trump on Tuesday told U.S. military personnel stationed in Japan to “Go out and buy a Toyota.” The president reportedly said Japanese Prime Minister Sanae Takaichi informed him of Toyota’s $10 billion investment plan. 

The $10 billion outlay, however, was not part of up to $400 billion worth of investment projects announced by Japan’s Ministry of Finance this week. These investments are earmarked for sectors such as energy, artificial intelligence (AI), and critical minerals.

The trade deal struck between Japan and the U.S. in September provided for Japan investing $550 billion in the U.S. in return for a stepped-down tariff rate of 15%.

What’s At Stake For Toyota

Earlier this week, Toyota reported that its September sales and production increased in the U.S. The automaker’s U.S. output jumped 29%, thanks to strong demand for its hybrids and a recovery from the suspension of production of two models a year earlier. Toyota’s U.S. sales climbed 14%, outpacing the global sales growth of 3%. 

In August, Toyota reduced its full-year operating income forecast by 16%, citing cost escalation stemming from U.S. tariffs on inputs. The company quantified the tariff impact as $10 billion. 

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