Trump’s Tariffs Imperil the Fortunes of a Nissan Factory Town

Kanda, a small town surrounded by the mountains on the south -eastern coast of Japan, is located hundreds of miles by all the main business centers or politics. But recently, the only thing in the mind of his residents is President Trump.

In restaurants and bars and around Kanda’s Small City Office, people nervously chat on the Rates of 25 % He declared on cars imports in the United States.

The reason for anxiety is impossible to lose: the vital lymph of the city is a tempting of attempted cars owned by the Nissan engine of Japan.

On a land ground two thirds of the size of Central Park, over 4,000 Nissan Line workers produce hundreds of thousands of vehicles every year. Half of them is sold in the United States.

“We really don’t know what to do with the rates here,” said Hironori Beppu, councilor of the Kanda Chamber of Commerce. “Without Nissan, Kanda’s financial situation would become really serious,” said Beppu.

Many things remain unclear on the car rates of Mr. Trump, who entered into force on Thursday. Above all, how long will they remain in place? Or will the Trump administration be willing to negotiate?

Kanda, a city of about 38,000 on Kyushu’s southern Japan island, could prove to be a preview of what takes place in similar cities oriented all over the world if the rates are held in place.

Since Mr. Trump Announcement of the car rates On March 26, Nissan took into consideration the transfer of part of his national system of the rogue, one of the models he produces in Kanda, in the United States, according to two people with knowledge of the issue that spoke on condition of anonymity in discussing internal plans.

Any great change in production may require working reductions in the Kanda factory, causing economic pain to the city and potentially influencing the wider industrial panorama of Japan if replicated by other automotive companies. Some economists provide that US car rates may have the economic growth of Japan this year.

The Nissan production site in Kanda recalls a small town, which extends over 500 acres, with well -kept restaurants, traffic lights and meadows. There are about 10,000 people who work overall, counting the logistical staff and workers of the companies that provide parts of Nissan.

On the site, the buildings that inhabit the car production lines connect directly to a port area, where hundreds of vehicles of vehicles equipped with driving steering wheels on the left sit in the sun, waiting to be shipped abroad. A colossal blue and white oil tanker marked “Panama”, sitting in water near one day last week.

In Kanda, where Nissan opened a factory for the first time 50 years ago, The economy of car export had long made sense.

The vehicle for sports utility Rogue that Nissan creates in Kanda and sells in the United States is also produced in America. But Kanda has accumulated efficiencies and even factoring in the previous rate of 2.5 percent and the shipping costs of the vehicles, it was less expensive to export thieves from Japan.

With a rate of 25 percent in place, the factory workers say they no longer know what the calculation is. Nissan did not respond to a commentary request.

The city of Kanda has grown in tandem with Nissan since the car manufacturer opened a factory in 1975. During a global expansion in the 90s, Nissan built a second factory, making Kanda the largest national production area of ​​the company.

Most of the areas outside the main cities of Japan are quickly aging. Kanda stood out as one of the few cities with a constantly growing population. The officials of the city proudly speak of Kanda’s place as one of the few dozens of municipalities in the country that are not based on the subsidies of the national government.

“This is thanks to Nissan,” said Kazuyuki Taguchi, head of the Kanda Transport and Trade Department. “Our city is our automotive industry,” he said. “That’s why we are trying to understand if the rates are short -term or long term and what kind of impact they can have.”

This is the question for everyone, from Nissan leaders to Japan’s best officials.

In response to US car rates, the prime minister, Shigeru Ishiba, declared last week that Japan has planned to create about 1,000 offices at national level that would investigate the impact of taxes on the internal industries.

Ivan Espinosa, a chief executive officer recently appointed Nissan, declared in an event last month that Nissan was trying to devise the plans in advance for several tariff scenarios, but which was struggled with the lack of clarity.

US rates come while Nissan was already renovating his global operations.

In November, after publishing a six -month drop of 90 percent of the operating profit, Nissan he said it was planned Cut 9,000 jobs and reduce its global production capacity of about 20 percent. At that moment, Nissan began to look at a potential merger with Honda Motor, but the interviews fallen to pieces A few months later.

Nissan people say that he is working on a renovation plan that will probably make deeper cuts.

Nissan intended to resize a certain production in the United States and other regions. But last week, the company said that now he intended to maintain the previous American production levels, also in his SMYRNA plant, in Tennessee, where he produces the Rogue SUV

The goal, Nissan said, was “to maintain a more localized volume in the United States which is without new car rates”. The production of US models in Mexico and Japan “will continue based on the needs of the market,” he said.

For now, when it comes to moving production from Japan, the car companies are unlikely to undertake large knee establishment actions in response to rates, said Takaki Nakanishi, head of the automotive consultancy company Nakanishi Research Institute of Tokyo. Rather, they will sell about one or two months of inventory they have in the United States and “wait and see,” he said.

If the rates last six months or a year, “companies can swallow this impact more or less,” said Nakanishi. “If they last four years, this will take structural changes.”

A recent Sunday evening in Kanda, several Nissan workers gathered in a small bar near the railway station, drinking and singing Karaoke. Chief Isshiki, 62, owner of the bar, said that Nissan’s employees have been his main customers in the last two decades.

Behind the counter, sipping a drink and occasionally snorting on an electronic cigarette, Mrs. Isshiki said her customers read the rates in the news. “Even those of us whose lives are indirectly supported by the Nissan factory are trying the discomfort,” he said.

One of the Nissan employees at Mrs. Isshiki’s bar that night was a 39 -year -old worker with whiten blonde hair who had moved from Nagasaki to work on the Kanda plant. Now the father of two children lives near the plant and mainly builds vans on its production lines.

“The rates are a concern, but I feel that Nissan will do his best to protect his employees in Japan,” he said, asking that his name is not used. “Anyway, for us on the floor, everything we can do is listen to the indications from above and continue to make machines.”