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Asian automaker shares hit as Trump threatens Mexico with tariffs

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Asian automaker shares hit as Trump threatens Mexico with tariffs

TOKYO (Reuters) – Shares in Asia’s major automakers and their suppliers sank on Friday after U.S. President Donald Trump threatened to slap tariffs on Mexican imports next month, potentially affecting vehicles made in Mexico and sold north of the border.

FILE PHOTO: A Toyota logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland March 5, 2019. REUTERS/Pierre Albouy

Trump, incensed by a surge of illegal immigrants across the southern border, said late on Thursday a tariff of 5% would be imposed on all goods coming from Mexico, increasing gradually each month until reaching 25% on Oct. 1, unless Mexico takes immediate action.

The move is likely to hit a broad range of industries, but the auto industry looks particularly vulnerable as many global carmakers manufacture vehicles in Mexico to take advantage of its cheap labor, trade deals and its proximity to the United States, the world’s second-largest auto market.

“Margins are so thin in the U.S. market right now that there’s no way that any automaker is not going to pass on these tariffs to their customers,” said Janet Lewis, an analyst at Macquarie Securities.

“The unknown factor is the impact on suppliers, as components can move back and forth between Mexico, the United States and Canada up to 20 times before they make their way into assembled cars.”

General Motors Co is the biggest car producer and exporter in Mexico, and its global peers Ford Motor Co, Volkswagen AG and Fiat Chrysler Automobiles NV also have manufacturing presence there.

In Japan, shares in Toyota Motor Corp fell 2% while Nissan Motor Co and Honda Motor Co fell about 3%. Mazda Motor Co took a bigger hit, tumbling nearly 7%. All four automakers operate vehicle assembly plants in Mexico, producing roughly one-third of the vehicles made in the country.

In South Korea, Hyundai Motor Co and affiliate Kia Motors Corp fell 1.1% and 4.2% respectively. Hyundai Wia Corp, which supplies auto components to the duo, fell 5.2%.

“Although we have to wait and see whether the U.S. tariffs plan will be really implemented, this is negatively affecting investor sentiment,” said Chang Moon-su, an analyst at Hyundai Motor Securities in Seoul.

Japan’s top automakers and their suppliers, including Denso Corp and Aisin Seiko Co, for decades have been building vehicles in Mexico not only for the domestic market, but also to export to the United States, taking advantage of previous free-trade agreements between the two countries.

Among them, Nissan produces the most vehicles in Mexico, and its exports to the United States account for roughly one-quarter of the firm’s total vehicle sales in the country, industry experts say. Its Sentra and Versa models are made in Mexico for the U.S. market.

Smaller rival Mazda exports about 30% of its Mexico-produced cars to the United States, while the figure for Toyota, which has been expanding U.S. production of pick-up trucks, and Honda is less than 10% each.

Japanese automakers together produced about 1.25 million vehicles in Mexico in 2018.

But production in Mexico is dwarfed by the number of cars Japanese automakers produce in the United States, their single largest market, where the top three manufacturers alone produce roughly 4 million vehicles each year.

Reporting by Naomi Tajitsu; Additional reporting by Hayoung Choi in Seoul; Editing by Stephen Coates and Christopher Cushing

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Pelosi flexes muscle over party in impeachment debate, but ‘dam’ could collapse

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Pelosi flexes muscle over party in impeachment debate, but ‘dam’ could collapse

House Speaker Nancy Pelosi has wielded her power to quash a faction of Democrats rallying for President Trump’s impeachment, but frustrated members within the party say the president is one misstep away from “that dam collapsing,” according to a Sunday report.

Since reassuming leadership over the house, Pelosi has thwarted her party’s liberal wing from going forward with impeachment proceedings, encouraging them to instead focus on other issues like health care.

Speaker of the House Nancy Pelosi, D-Calif., reflects on President Donald Trump's statement that he would accept assistance from a foreign power. 

Speaker of the House Nancy Pelosi, D-Calif., reflects on President Donald Trump’s statement that he would accept assistance from a foreign power. 
(AP)

“I don’t think there’s anything more divisive we can do than to impeach a president of the United States, and so you have to handle it with great care,” Pelosi told CNN on Sunday. “It has to be about the truth and the facts to take you to whatever decision has to be there.”

Some lawmakers say their deference to Pelosi is out of respect for the speaker’s political expertise, and agree that impeachment would do more harm than good.

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“She is the single smartest strategist that we’ve ever had…People are not wanting to second guess her because she’s been right on so many fronts,” Rep. Jan Schakowsky, D-Ill., told the Washington Post.

But other Democratic lawmakers, like Rep. Kurt Schrader, D-Ore., admit they toe the party line out of fear.

“One, you want to be a team player and support the leader’s position, but secondly you’re worried about your own self and…what can happen if you don’t follow along,” Schrader told the paper.

Some argue that President Trump’s defiance of congressional investigators will eventually break the divide between moderate Democrats and its liberal wing.

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Rep. Gerald E. Connolly, D-Va., described Pelosi’s hold over Democrats as “fragile” because “we’re kind of one event, one piece of explosive testimony, one action by Trump away from that dam collapsing.”

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The Democrats’ pro-impeachment camp howled this week after Trump said in an interview with ABC that he’d be willing to listen if a foreign government had dirt on an opponent. Yet despite the familiar refrain of impeachment, Pelosi didn’t budge an inch on impeachment after Trump’s comments.

Fox News’ Chad Pergram contributed to this report.

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Trump asks Mulvaney to leave Oval Office for coughing during ABC interview

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Trump asks Mulvaney to leave Oval Office for coughing during ABC interview

President Trump was apparently so perturbed by his chief of staff coughing during an interview with ABC’s George Stephanopoulos in the Oval Office last week, that he asked his staffer to leave the room, according to a transcript from the station.

Trump had been asked a question about his tax returns when someone off camera – identified as Mulvaney – reportedly begins coughing.

“I hope they get it, because it’s a fantastic financial statement,” Trump said Stephanopoulos amid apparent coughing before saying: “And let’s do that over, he’s coughing in the middle of my answer.”

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“I don’t like that, you know, I don’t like that,” Trump reportedly said of Mulvaney’s coughing. “If you’re going to couch, please leave the room. You just can’t, you just can’t cough. Boy oh boy.”

“Your chief of staff,” Stephanopoulos reportedly clarified.

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The interview, which was broadcast Sunday, proceeded with Trump saying although he wanted people to see his “phenomenal” financial statement, it’s “not up to me, it’s up to my lawyers.”

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Buttigieg says he won’t be first gay president, ‘almost certain’ we’ve had others

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Buttigieg says he won't be first gay president, 'almost certain' we've had others

Mayor Pete Buttigieg doesn’t believe he’ll be the first gay president if elected in 2020.

“I would imagine we’ve probably had excellent presidents who were gay — we just didn’t know which ones,” he told “Axios on HBO.”

“I mean, statistically, it’s almost certain.”

FILE: Democratic presidential candidate Mayor Pete Buttigieg speaks at a grassroots event on Friday, June 14, 2019, in Alexandria, Va.

FILE: Democratic presidential candidate Mayor Pete Buttigieg speaks at a grassroots event on Friday, June 14, 2019, in Alexandria, Va.
(AP)

Asked if he possibly knew which commander-in-chief was playing for the other team, the Democratic hopeful said: “My gaydar even doesn’t work that well in the present, let alone retroactively. But one can only assume that’s the case.”

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Buttigieg — who is mayor of South Bend, Ind. — has been rising in the polls as of late. He would be the first openly gay presidential candidate, if nominated next next year.

The 37-year-old has been asked in the past about the possibility of there ever being a gay president, with BuzzFeed posing the question back in March.

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“My gaydar is not great to begin with and definitely doesn’t work over long stretches of time,” he repeated. “I think we’ll just have to let the historians figure that out.”

To read more from The New York Post, click here

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