American carmakers are worried about a trade deal with Japan. They don’t like that tariffs on Japanese cars will be lower than on cars imported to the US from Mexico and Canada, where many of them have factories and suppliers. Matt Blunt, head of the American Council on Automotive Policy, said this today, according to Reuters.
Trump signs agreement with Japan, domestic industry protests
US President Donald Trump announced the conclusion of a trade agreement between the US and Japan last night. Goods from Japan, including cars, will be subject to a 15% tariff. Imports from neighbouring countries – Canada and Mexico – are subject to a 25% tariff.
“Any agreement that imposes lower tariffs on Japanese imports with virtually no US content than tariffs imposed on vehicles manufactured in North America with a high US content is a bad deal for US industry and US auto workers,” Blunt said. The council he heads represents carmakers General Motors, Ford, and Chrysler’s parent company, Stellantis.
Japanese automakers celebrate
Automobiles account for a huge portion of trade between the US and Japan. However, almost all trade is one-way from Japan to the US, which has long been a thorn in Trump’s side. In 2024, the US imported more than $55 billion worth of vehicles and auto parts from Japan, while only about $2 billion worth came from the US to the Japanese market.
Shares in Japanese carmakers are rising sharply today in response to the conclusion of the trade agreement with the US. Honda is up more than 10 percent and Toyota is even adding more than 14 percent. The enthusiasm on the financial markets has also spread to South Korean carmakers. They are being helped by expectations that Seoul could reach a comparable agreement. Kia is up eight percent and Hyundai more than seven percent.
Source: Reuters
