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Toyota Motors said it will invest an additional $10bn into the US over the next five years, weeks after President Donald Trump visited Japan where he was presented with an array of spending pledges.
The announcement on Thursday coincided with Toyota’s opening of a battery plant in North Carolina, which it said marked an investment of “nearly $14bn and the creation of up to 5,100 new jobs”.
Toyota’s pledge follows Trump’s trip in late October when he and Japanese Prime Minister Sanae Takaichi spoke of bringing the security alliance between the two countries into a “new golden age”.
In July, Washington agreed to a deal to impose 15 per cent tariffs on goods imported into America from Japan, the world’s fourth-largest economy.
Trump had previously imposed a levy of 25 per cent on Japan as he pushed to shift manufacturing back to the US and correct what he perceived as imbalanced trade arrangements.
Earlier this month, when announcing its second-quarter results, Toyota estimated that the tariff impact would be ¥1.45tn this year, or roughly $9.4bn.
In return for lower tariffs, Japan has committed to invest $550bn into the US between now and January 2029, when Trump’s presidency is due to end.
The world’s largest automaker did not give any further details about how it would spend the $10bn. Analysts have suggested that Toyota will look to increase production in America, noting that executives have discussed importing US-made cars into Japan.
“There are plenty of ways for Toyota to put that investment to good use in the US in the coming years, from simple capacity additions, to the localisation of hybrid electric vehicle parts and production of hybrids themselves, as well as AI-related spending around autonomous driving and robotics,” said James Hong, an analyst at Macquarie.
During Trump’s trip to Japan last month, his first visit to the country after his re-election, he was presented with a list of potential investments by the government.
A memorandum of understanding on the investment deal set out a one-sided arrangement with Trump holding ultimate approval authority for Japanese investments in the US and with profits from the projects flowing disproportionately to America.
Japan’s list — in infrastructure, energy, AI and critical minerals “applicable to” the scheme — did not include Toyota, despite Trump saying at the time that the carmaker was planning a large outlay.