Japanese Brake Supplier Drops Mexico from Plant Site List

Japan’s Nisshinbo Holdings says it has scrapped plans to build a brake components factory in Mexico because of U.S. President Donald Trump’s determination to revamp or abandon the North American Free Trade Agreement.

The company apparently is the first in Japan to cancel a Mexican facility because of the ramifications of Trump’s “America First” trade policy, says The Nikkei.

The 10 billion-yen ($89 million) plant was to supply customers in Mexico and the U.S. with brake linings and disc pads. Nisshinbo intended to finalize a site location by the end of this year, and Mexico was at the top of its list, the newspaper reports.

But Trump has threatened to levy a hefty border tax on all goods from Mexico. Now, says CEO Takayoshi Okugawa, “We are back on the drawing board.” The company indicates it might erect a facility in the U.S. instead, although it expects significantly higher production costs there.