The Bluegrass State has been home to Toyota for more than three decades. It was our first U.S. plant and has become Toyota's largest manufacturing plant in the world.
Our Georgetown plant — 8,000 team members strong — has the capacity to manufacture 550,000 vehicles and 650,000 engines annually. We are driving into the future with two major investments of nearly $1.6 billion to modernize our plant and expand our engine production.
These investments are being overshadowed by the government’s threat to impose a 25 percent tariff on imported vehicles and component parts because they potentially pose a “threat to national security.” Absurd as it sounds, the U.S. Commerce Department is holding hearings on July 19-20 in Washington as part of its investigation to determine this so-called threat. Ironically, Georgetown-built Camrys and Avalons are among the vehicles Toyota exports to 31 countries.
Toyota has 137,000 employees and operates 10, and soon 11, plants in the U.S. We are an exemplar of the manufacturing might of America. A 25 percent tariff on automotive imports, which is really just a tax on consumers, would increase the cost of every vehicle sold in the country, not just those sold by Toyota.
Like most global automakers, including Detroit-based companies, Toyota sources most key parts and components locally, but also imports certain specialized parts and components. No vehicle in America, whether from Toyota, GM, Ford or Hyundai, is sourced exclusively from U.S. parts and components.
Even though we assemble Camrys and Avalons here in Georgetown, we still need imported parts. For example, a 25 percent tariff will increase the cost of a Toyota Camry by at least $1,800.
Free and fair trade is the best way to create sustained growth for the auto industry and provide more choice and greater value for consumers. Import tariffs on vehicles and components will increase product costs, lead to higher prices for consumers and a decline in sales, auto production, jobs and vehicle exports.
And as we’ve seen recently, erecting trade barriers, like import tariffs, will ultimately invite retaliation from other nations and undermine global competitiveness. Like others in the auto industry, we believe that government tariffs now in effect, or that are being proposed, will ultimately hurt consumers.
Toyota stands ready to work with the administration to advance opportunities that remove such barriers and promote economic growth.
We want to thank Senate Majority Leader Mitch McConnell, Sen. Rand Paul, Rep. Andy Barr and other members of Kentucky’s delegation for their support on this issue. Congress must oppose this misguided idea and apply the brakes to auto tariffs. They would hurt our plant and our state.
Susan Elkington is president of Toyota Motor Manufacturing, Kentucky, Inc.