Sharply higher U.S. import duties on small trucks went into effect yesterday, with the old 4 percent duty on the cab-chassis of imported mini-pickups increasing to 25 percent.
The new charge could add up to $1,000 to the price of the vehicles if the extra cost were passed on to consumers.
In Tokyo, both Nissan and Toyota, the companies primarily affected by the new levy, said they intend to take legal action to overturn the reclassification, while the Japanese government next week will apply to the General Agreement on Trade and Tariffs (GATT) in Geneva to have the move reversed, claiming the increase is contrary to GATT rules.
Toyota President Sadazo Yamamoto said the new tariff may mean Toyota will have to close its assembly plant in California.
Customs first proposed the tariff boost in May, arguing that it would close a loophole that allowed foreign automakers to ship cab-chassis units to the United States and then attach them to truck beds, thus qualifying for the low 4 percent duty.
Until today, only completed trucks were taxed at the full 25 percent.
A lawsuit filed this week by Thompson Toyota Inc., of Redwood City, Calif., sought a restraining order against the new tariff. But U.S. District Judge June L. Green on Wednesday denied the request saying Thompson Toyota failed to show "irreparable damage" from the higher duty.
Robert Hormats, deputy U.S trade representative said Japan exported light trucks to the United States in record numbers over the last few months, apparently to beat the higher tariff. Last month, 36,000 small trucks were imported from Japan to the U.S., the largest number ever.
Yamamoto said his company, through Toyota U.S.A., "will follow procedures outlined in the U.S. customs laws to enter a complaint with the U.S. Treasury Department and then file a lawsuit in the customs court."
Japan top automaker said it will now export finished light trucks instead of semi-finished cab chassis to the United States.