US President Donald Trump signed an executive order on Thursday to introduce lower tariffs on Japanese cars. Import duties will fall from the current 27.5 percent to 15 percent. According to Reuters, the move will bring relief not only to companies such as Toyota, Honda, and Nissan, but also to the entire Japanese economy, which is dependent on exports.
New US tariff policy
The decision to reduce tariffs on imports of Japanese cars and other products was made in July. The regulation will take effect seven days after signing and will apply retroactively to goods imported into the United States since August 7. With this move, the US administration is seeking to adjust trade relations with Japan and mitigate the impact of previous tariff measures, which led to a significant reduction in Japanese exports to the US.
The regulation includes confirmation that Japan is investing $550 billion in the United States, which is equivalent to approximately CZK 11.5 trillion. It also stipulates that the 15% tariff on Japanese imports agreed in July will not be added to the higher tariff that applies to beef. On the contrary, items that were previously subject to tariffs of less than 15 percent will now be taxed at a rate of 15 percent, creating a uniform tariff policy for most Japanese exports.
Tariff reduction helps Japanese automakers
Trump’s previous tariffs significantly reduced Japanese exports and hit Japanese automakers hard. Toyota, for example, announced last month that it expects to lose nearly $10 billion as a result of the tariffs. The regulation therefore provides some relief for Japanese manufacturers while stabilizing trading conditions, which may help restore some of the lost export volume.
The new regulation also puts competing South Korean automakers at a disadvantage. While Japanese products are now subject to a reduced 15 percent tariff, US tariffs on imports of South Korean cars remain at 25 percent. This creates different market conditions and may strengthen the position of Japanese carmakers in the US, while South Korean companies will continue to face higher tariff barriers.
Source: Reuters
