TOKYO -- Donald Trump's acknowledgment of Toyota Motor's latest American investment is a welcome development for a Japan Inc. eager to avoid a rekindling of the trade frictions that colored bilateral relations in the 1980s and '90s.
This marked Trump's first positive comment about Toyota in the months since he criticized plans to build a Mexican factory with such strong language as "NO WAY!" on Twitter. He had also demanded that Toyota construct a new plant in the U.S.
Such verbal jabs have fed worries in the stock market and Japanese industry. Automobiles account for more than 60% of Japan's trade surplus with the U.S., and Toyota is the juggernaut. Trump's rhetoric has put pressure on more than just one company.
Days after Trump unleashed a Twitter attack on Toyota on Jan. 5, Toyota President Akio Toyoda announced plans to invest $10 billion in the U.S. over five years. This will include boosting capacity by more than 40,000 units at an Indiana plant, as well as hiring 400 workers.
But that announcement did not draw the thanks that the president extended to Ford Motor for canceling a planned Mexican factory. At a mid-March roundtable with business leaders in the auto state of Michigan, Trump urged Toyota to build new plants in the U.S.
Toyota earns more in America than anywhere else. The advent of the Trump administration brought to light the importance, more than ever, of relations with the country to the automaker. So the company has expanded its public relations staff, mainly U.S. employees.
By reaching out to Vice President Mike Pence, formerly governor of Indiana, and others, Toyota has explained its intent to contribute to the American economy over the long term by nurturing talent and updating production technologies. The inclusion of a positive remark from Trump in Toyota's investment announcement Monday thus marked a milestone.
Trump recently met with Chinese President Xi Jinping and agreed to work on a 100-day plan for bilateral trade policy. The two sides have begun looking into specifics on correcting trade imbalances.
Japanese leaders will hold an economic dialogue with Pence in Japan starting April 18. Concerns have heightened over the possibility of tough demands on the auto industry here. By announcing the U.S. investment now, Toyota likely aimed to keep Japanese carmakers from being singled out.
But Trump has not eased up on his protectionism. Toyota, meanwhile, still faces the challenge of balancing domestic and overseas production as it retains business relations with more than 30,000 companies in Japan. Over the medium to long term, it will likely face difficulty in accommodating Trump's demands.