Trump's Tariffs Pummeling Japan's Auto Exports to the States
Increased U.S. tariffs result in a significant escalation of Japanese car exports to America - U.S. import decline for Japanese automobiles due to Trump's tariffs
The dip in exports isn't as drastic as you might think upon first glance. Taro Saito, chief economist at NLI Research Institute, explains, "Automakers seem to be significantly slashing their prices to swallow the extra costs of tariffs without losing their loyal USA customers."
Confronting a 10% base tariff rate (similar to the one slapped on nearly every nation by Trump), Japan - a steadfast ally - is also saddled with an additional 25% on cars, a 50% hike on steel and aluminum, and Trump is threatening to up this general tariff rate to a whopping 24%.
Feeling the heat, Japan - heavily reliant on exports - and the automotive sector, which accounted for an impressive 30% of exports to the USA last year, is taking a beating. In Japan, the automotive industry supports around 8% of all jobs.
The downward spiral doesn't stop in the auto sector: the USA's insatiable appetite for all things Japanese saw exports crashing by approximately 11% in May, according to official figures. American imports tumbled by a staggering 13.5%.
Negotiating with the USA to tackle the tariff predicament, Prime Minister Shigeru Ishiba chatted with US President Trump at this week's G7 summit in Canada. Despite optimistic buzz, Ishiba noted, "With our opinions still muddy, we've yet to see an agreement crossed the finish line."
- Auto Exports
- Tariffs
- Import Tariffs
- Car
- USA
- Japan
- Trade Relations
- Currency Exchange Rates
- Japanese Automakers
- G7 Summit
- The extra costs of import tariffs on cars from Japan to the United States are causing Japanese automakers to significantly reduce their prices to avoid losing their loyal US customers.
- The increased tariff rate of 24% on cars from Japan to the US, along with similar changes in steel and aluminum, is heavily impacting Japan's auto industry, which accounts for 30% of exports to the US and supports around 8% of all jobs in Japan.
- Despite negotiations at the G7 summit between Prime Minister Shigeru Ishiba of Japan and US President Donald Trump to address the tariff predicament, an agreement has yet to be reached, and trade relations between the two countries remain uncertain.
