US president-elect Donald Trump has said that the US will quit the Trans-Pacific Partnership (TPP) free trade deal on his first day in the White House.

Trump made the announcement in a video message. “I am going to issue our notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country,” the president-elect said. “Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back on to American shores.”

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During his campaign to be elected US president, Trump made a number of commitments to roll back on international free trade agreements and encourage more manufacturing and job creation in the US. He also suggested that the US could impose higher tariffs on Mexican imports to penalise companies who have put low-cost manufacturing facilities overseas.

However, the TPP deal was unlikely to significantly impact international sourcing decisions, especially at the OEM level. That said, some concerns over TPP were expressed in the US auto sector. Some parts of the US auto parts industry had expressed concerns over the TPP deal and the possibility that it could lead to heightened low-cost imports from Asia, as well as help Japanese competitors to push their costs down.

Under the TPP deal, the US would keep its 25% tariffs on Japanese truck imports for 30 years. That effectively meant business-as-usual for the Japanese OEMs who have built plants in North America to supply trucks to the US market. The Big 3 would therefore likely remain strong in what is a very profitable part of the US light vehicle market. Tariffs on auto parts would fall more quickly, which could put some pressure on parts producers and their lower tier suppliers, analysts had suggested.

The TPP trade deal was signed by 12 countries which together cover 40% of the world’s economy, but has yet to be ratified by all signatories. The outgoing Obama administration was a big supporter of the deal, but said that ratification would be a decision for the next administration.

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Asian countries signed up to the TPP, especially Japan, are likely to be extremely disappointed by the news. Japanese prime minister Shinzo Abe was a strong supporter of TPP and has reportedly said the deal ‘has no meaning’ without the participation of the US. However, there is some speculation that the other signatories of the deal may now look to forge a free trade deal with China.

Donald Trump’s latest remarks could be part of a negotiating tactic, but they appear to suggest that the protectionist sentiment expressed during his election campaign will, to some degree, follow through to policy when he is in office (inauguration January 20th, 2017). He has also said that he would like to see the NAFTA renegotiated, something that could have far more serious consequences for the US auto industry.

See also: ANALYSIS: What does TPP mean for autos?