Japan's Nippon Steel fears Trump threat to NAFTA

TOKYO (Reuters) - Japan's biggest steelmaker Nippon Steel & Sumitomo Metal Corp is concerned about U.S. President-elect Donald Trump's threat to renegotiate or scrap a North American trade pact because of possible adverse effects on its business in Mexico.

Trump has vowed if elected to force Canada and Mexico to renegotiate the North American Free Trade Agreement (NAFTA) with the United States, as part of an effort to protect and restore American jobs.

Nippon Steel, the world's third-biggest steelmaker, has two plants in Mexico to supply steel sheets and pipes for Japanese and other automakers that produce cars to ship north to the giant U.S. market.

"I don't think it would be easy to scrap NAFTA, but if it happens, we will suffer a severe impact," Toshiharu Sakae, Nippon Steel's executive vice president, told Reuters on Thursday.

"We are worried that his plan to put America first, which suggests an inward-looking policy, not hegemony, may lead to a trend towards a lower dollar and put the brakes on free trade," he said.

Asked whether the Tokyo-based company is considering any contingency plans, Sakae said: "Not yet."

"It will take some time for the new administration to map out its policies. We'll need to closely watch how things will develop," he said.

(Reporting by Yuka Obayashi and Ritsuko Shimizu; Editing by Tom Hogue)