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Business trends

Businesses worried about Trump impact on Mexican operations

Some scrap plans to set up shop in industrial parks

MEXICO CITY -- The deepening rift between the U.S. and Mexico, set off by President Donald Trump, is raising anxiety among businesses operating in or planning to enter the market south of the border.

Mexico, taking advantage of its cheap labor costs, has thrived as a hub for exports to the U.S. But with Trump upending the two countries' relations, the business environment could change significantly, possibly forcing companies to alter their Mexican strategies.

The impact on automakers is seen as especially huge. Ford Motor, which has been singled out by Trump for its plan to build a new Mexican plant, has booked a $200 million charge related to canceling the project.

The Bajio industrial park in central Mexico is home to many Japanese companies. Some corporations are scrapping plans to set up shop in industrial parks, said an official at a general contractor.

Japan's top three automakers -- Toyota MotorNissan Motor and Honda Motor -- all operate plants in Mexico, along with Mazda Motor and electric-vehicle motor supplier Mabuchi Motor.

JFE Steel, which plans to open a new automotive steel sheet plant in Mexico with U.S. partner Nucor in 2019, is likely collecting cues from channels including former Nucor CEO Dan DiMicco, who has been an adviser to Trump since the election campaign.

Japanese airline operator ANA Holdings is also watching developments closely. It plans to launch service between Mexico City and Narita Airport outside Tokyo on Feb. 15. At an earnings briefing on Friday, Corporate Executive Officer Yuji Hirako said the company has no intention of changing that plan at this point, including the planned service schedule.

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