WASHINGTON – Days before a group of Republican lawmakers were due to discuss their party's controversial proposal to tax all imports, Toyota Motor Corp. sent an urgent message to its U.S. dealers: Tell the politicians the tax would seriously hurt car buyers.
Some of Toyota's 1,500 dealers heeded the call and contacted members of the House of Representatives' tax-writing Ways and Means Committee, urging them to rethink their proposal, according to people familiar with the effort.
Imposing a 20 percent tax on imports would force consumers to pay potentially thousands of dollars more for vehicles, they warned.
The Japanese automaker's mobilization of its army of dealers underscores the growing alarm among some of the world's largest companies that sell imported goods in the United States. They fear a big tax on imports would hurt their sales and profits and put them at a disadvantage to rivals more reliant on U.S.-made products.
"Cost is going to go up, as a result demand is going to go down. As a result, we're not going to able to employ as many as people as we do today. That's my biggest fear," Toyota's North America CEO Jim Lentz said in an interview.
Toyota and the automakers are not alone in this lobbying effort. While companies and industry groups frequently lobby Congress, the threat of an import tax has mobilized an unusually broad swath of firms at home and abroad. That lobbying effort is taking place largely out of the public eye partly to avoid potential conflict with President Donald Trump, who has attacked companies for manufacturing abroad for U.S. consumers.
Two of Minnesota's biggest companies are also pressing members of Congress to reject the tax on imports.
Brian Cornell, chief executive of Minneapolis-based Target Corp., traveled to Washington to meet members of the House Ways and Means Committee. He told them an import tax could impact consumers' ability to buy essential goods, such as baby supplies that are made overseas and imported to the United States, according to a person familiar with the talks.
Target spokeswoman Dustee Jenkins confirmed the Cornell visit.
The largest U.S. electronics retailer, Best Buy Co., headquartered in Richfield, has circulated a flier to lawmakers. It cites an analyst forecast that a 20 percent tax would wipe out the company's projected annual net income of $1 billion and turn it into a $2 billion loss.
The flier, a copy of which was seen by Reuters, argues that foreign internet sellers like China's Alibaba.com would be able to avoid the tax by making sales online and shipping to U.S. consumers directly, "undercutting U.S. businesses."
Company officials have been handing out the flier to lawmakers and their staff on Capitol Hill, Best Buy spokesman Jeff Shelman confirmed.
But with 97,000 people in the United States and a presence in nearly every congressional district, Toyota has nearly unmatched reach.
Earlier this month, Trump targeted Toyota, threatening to impose a hefty fee on the world's largest automaker if it builds its Corolla cars for the U.S. market at a factory in Mexico.
The White House said last week that a border tax is one option under review to pay for a wall with Mexico, although what exactly Trump is planning to do is still not clear. He has pledged to impose a "big border tax" on Mexican imports.
The plan proposed by House Republicans would cut corporate income tax to 20 percent from 35 percent, exclude export revenue from taxable income and impose the 20 percent tax on imports.
