Why Detroit Automakers Are Blasting U.S.' Tariff Deal With Japan
The U.S. has agreed to lower the tariff rate on Japan's auto exports to 15%, and a group representing General Motors (GM), Ford, and Stellantis has sounded off. Matt Blunt, head of the American Automotive Policy Council (AAPC) representing these Detroit manufacturers, stated: 'Any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers,' Reuters reports. Trump has also floated increasing tariffs on Mexico and Canada to 30% and 35%, respectively, by August 1. The AAPC similarly criticized the U.S. for agreeing to a 10% tariff rate on Britain's first 100,000 annual vehicle exports to America.
UAW Local 372 in Trenton, Michigan —
Source: Getty
However, the AAPC wasn't the only organization that spoke out against the Trump administration's deal with Japan. The United Auto Workers (UAW) union said in a post on X, formerly Twitter: 'The UAW is deeply angered by the Trump administration's announced trade deal with Japan. What we've seen so far makes one thing clear: American workers are once again being left behind.' This group added that the deal rewards transnational automakers that rely on low-road labor practices, which include substandard wages, excessive temps, and union-busting. Detroit's 'Big Three' automakers are already under financial pressure from tariffs. GM shared this week that it suffered $1.1 billion in tariff-related losses during Q2, with Q3's forecast appearing worse. Stellantis' tariff losses so far are less, but still hefty at about $352 million. Like GM, Stellantis anticipates that tariffs will further erode profits during the second half of 2025. Ford has anticipated a $1.5 billion financial hit from tariffs this year.
How Japan's trade agreement could eventually benefit U.S. automakers
While Japan's deal doesn't immediately benefit Detroit Three companies like Ford, which assembled over 80% of its vehicles in the U.S. last year, it could pay dividends in the long run. As part of its tariff agreement with the Trump administration, Japan agreed to provide the U.S. with greater access to its auto market. In March, Cadillac said it was introducing right-hand-drive electric vehicles (EVs) and promised a complete lineup of EVs in Japan, according to The Detroit News. President Trump posted on Truth Social: 'Remember, Japan is, for the first time ever, OPENING ITS MARKET TO THE USA, even to cars, SUVs, Trucks, -and everything else, even agriculture and RICE, which was always a complete NO, NO.' Despite the AAPC clearly expressing its feelings about Japan's trade deal, U.S. Commerce Secretary Howard Lutnik stated that he spoke with CEOs whose companies are represented by the group, and said, 'They are cool with it,' CNBC reports.
A car hauler crossing the Ambassador Bridge between Windsor, Canada and Detroit, Michigan —
Source: Getty
Final thoughts
Japan's trade agreement with the U.S. offers domestic benefits, including a $550 billion investment in American industries such as automotive manufacturing, $150 billion more than the initially requested amount, and increased access to Japan's car market, which could become a priority for Detroit's Big Three. Still, major U.S. automakers like GM, Ford, and Stellantis have a right to be upset as they wait for Canada and Mexico negotiations to conclude and hear President Trump threatening increased tariffs on both countries that could significantly impact USMCA (United States-Mexico-Canada Agreement) manufacturing.
About the Author
Cody Carlson View Profile
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
30 minutes ago
- The Independent
Over 300,000 cars recalled by major vehicle manufacturer
Ford is recalling 312,120 US vehicles, including certain 2025 Lincoln Navigator, F-150, Expedition, Bronco, and Ranger models. The recall addresses a potential Electronic Brake Booster defect that could lead to a loss of power brake assist, increasing stopping distance and crash risk. The issue arises from the EBB motor's sensitivity to voltage disturbances, which can cause it to shut down and trigger warning lights. The remedy is a free software update for the EBB module, available over-the-air or through Ford and Lincoln dealers, with owner notifications commencing in late August. Ford has issued a record number of recalls this year, attributing the high volume to proactive safety measures and increased audits.
Reuters
31 minutes ago
- Reuters
Proposed Canada-US trade deal could still be weeks away, says Ottawa
OTTAWA, Aug 1 (Reuters) - A proposed U.S.-Canada trade deal could still be weeks away, Ottawa's chief negotiator said on Friday, a day after U.S. President Donald Trump imposed higher tariffs on imports from Canada. Trump - who had set an August 1 deadline for an agreement - signed an executive order increasing tariffs on Canadian goods to 35% from 25% on all products not covered by the U.S.-Mexico-Canada trade agreement. Prime Minister Mark Carney insisted on the talks to reset bilateral relations, saying Trump's tariffs have upended decades-old trading and security ties. The negotiations, though, have so far produced little. Although over 90% of Canadian exports enter the United States without duties, the tariffs apply to crucial sectors such as steel, aluminum and automobiles. Federal cabinet minister Dominic LeBlanc, in charge of U.S. trade relations, said Canada had always made clear it would only accept a good deal. "At the end of business yesterday that agreement was not yet in sight ... there remain sectors the Americans are targeting which are essential for the Canadian economy," he told public broadcaster Radio-Canada. "Over the coming weeks we will ... continue talks with the Americans in an attempt to find a deal that would put us in a better position." Separately, LeBlanc told reporters in Washington that he would speak to U.S. Commerce Secretary Howard Lutnick next week and hoped to meet him in August. "The doors aren't closed, the doors are open, the conversations are ongoing," he said. The White House cited what it said was Canada's failure to stop fentanyl smuggling and address U.S. concerns about trade barriers. Washington is also unhappy about Canada's refusal to drop its own countermeasures, which were first imposed by former Prime Minister Justin Trudeau. He resigned in March to be replaced by Carney, who won an April election promising to stand up to Trump. In June, Carney had threatened to ramp up counter tariffs in July unless there was progress on the deal. A statement he issued on Friday did not mention retaliation. Brian Clow, who was in charge of U.S. relations inside Trudeau's office for several years, noted Trump had announced deals with nations that declined to impose counter tariffs. "Unfortunately, Canada stands on its own right now, along with China, because many other countries ... refused to stand up to this President," he said by phone. "So I'm not sure that further retaliation is the way to go." Carney's talk about standing up to Trump cannot hide the divisions between those advocating for a hard line and those who worry about the potential economic damage. Goldy Hyder, president of the Business Council of Canada lobby group, said Canada was struggling at the talks and urged a new approach. "As someone said to me, Canada is playing chess, but there's nobody playing chess with it at the other end," he said. "We've got to make sure that we are thinking through: 'What have we been doing and what do we need to do?'," he told CBC News. "We've got to move with greater urgency, because our own economy is very fragile."
BBC News
an hour ago
- BBC News
After a blown deadline, what next for US-Canada trade?
A self-imposed deadline for a new US-Canada trade deal came and went on Friday. So what happens next for these two deeply entwined neighbours?Canada and the US have been locked in a tariff war for six months and, despite talk of "intense" negotiations in recent weeks, a trade agreement remains elusive. Both President Donald Trump and Prime Minister Mark Carney have poured cold water on the idea they will reach a quick, and tariff-free, deal. And Trump's open criticism of Canada's move to recognise a Palestinian state dashed hopes for a last minute agreement earlier this pessimism marks a shift in tone from as recently as June's G7 meeting, when the two leaders set themselves the summer deadline. Canadian negotiators have come to the conclusion that "it's not the end of the world" if a quick deal isn't reached and "that quality over speed and a rushed agreement matters a lot", said Fen Hampson, a professor of international affairs at Carleton University in - who has been tight-lipped about the negotiation details - has said as much himself, repeating that just "any deal" won't do. Still, there are pressures on both sides to give businesses a reprieve. Conservative leader Pierre Poilievre said on Friday he shares "Canadians' disappointment" that a deal was not reached by the deadline. He urged Carney's Liberals to do more to "take back control of our economic future". Canada is now facing a 35% tariff rate, though there is a carve out for goods compliant under a current free trade deal. American global tariffs on steel, aluminium, autos and auto parts are hurting, as the US is a top market for those sectors. The Trump administration has justified those tariffs by claiming a lack of co-operation on stemming the flow of illicit drugs like fentanyl. Canada denies that, noting about 1% of US fentanyl imports originate in Canada. It has also brought in new border protections and a "fentanyl czar" in recent months in an effort to address Trump's concerns. Threatened tariffs on copper and the expected end of a global tariff exemption used by shoppers of goods under $800 could also has responded with C$60bn ($43.3bn; £32.3bn) in counter tariffs on various American goods - the only country along with China to directly retaliate against Trump."It comes as no surprise that businesses are craving certainty after months and months of tumultuous announcements," said Catherine Fortin-Lefaivre, vice-president of international policy and global partnership at the Canadian Chamber of Commerce. "But at the same time, they're not craving certainty at the expense of a really bad deal." A few factors give Canada some breathing paper, it looks like the country is facing a severe tariff rate from the US, but trade is currently more free than the levies suggest at first March, Trump announced a tariffs reprieve on goods compliant with the Canada–United States–Mexico Agreement, known in Canada as CUSMA and the US as the deal - negotiated during Trump's first term in office - came into force five years ago. Almost 90% of Canadian exports to the US are ultimately able to cross the border duty free, if firms file out necessary paperwork, under that agreement."That has given us a buffer, no question about it, that other countries don't have right now," said Prof means Canada is overall paying a much lower tariff rate than many of the deals already inked with the US, like the EU, South Korea and Japan at 15%, or Indonesia and the Philippines at 19%.Ottawa has also brought in some relief programmes for affected industries and has also collected about C$1.5bn more in import duties than in the same period last year, due to the counter tariffs. Why Trump's global tariffs 'victory' may well come at a high priceSee the Trump tariffs list by countryFive things now pricier in Canada due to tariffs'In business, indecision is killer' - Canadian firms seek certainty And while in the US consumer confidence is up and prices there have remained contained, it helps Canada's negotiating position if they can wait for Americans to start feeling the pain of tariffs."It's Americans who are going to squawk," said Prof Hampson. Ms Fortin-Lefaivre predicts US businesses, especially smaller firms that don't have the same resources to withstand them, will be pressuring political leaders. "So that pressure could play to our advantage," she said. Canadians also appear willing to give the new prime minister some leeway. Opinion polls suggest they are generally satisfied with his handling of "understands that doing what's best for the economy right now is actually what's best for him politically", Martha Hall Findlay, director of the University of Calgary's School of Public Policy and a former Liberal MP, told the BBC. Trump has said he is imposing tariffs to boost domestic manufacturing, open overseas markets and raise money for the government. He is also using them to push countries like Canada on a range of non-trade issues, including military the last few weeks, Ottawa has significantly ramped up its defence spending, boosted security at the shared border and killed a digital tax opposed by American tech firms. Those moves show Canada is "doing what the Americans wanted us to do", said Ms Fortin-Lefaivre. She hopes Canadian negotiators are pushing for tariffs to be as low as possible, as well as working to ensure the two deeply integrated supply chains are able to continue working together. Canada is pressing for relief on the 50% steel and aluminium tariffs, which are squeezing US automakers. And on Thursday, Treasury Secretary Scott Bessent signalled in an interview with CNBC that is an option on the table. Trump meanwhile, has raised a number of longstanding trade irritants besides fentanyl, including Canada's protections around its dairy industry. Ottawa has previously warned of more countermeasures to come if talks collapse, though political appetite for that may be waning. Retaliatory tariffs "haven't seemed to have had the kind of impact that we would hope for", British Columbia Premier David Eby recently told retaliation, Prof Hampson said: "The Americans have escalation dominance here. So you want to be smart about it." A spokesperson for Carney declined to say whether more countermeasures remained on the table. Meanwhile, Canadian negotiators have been in Washington most of this week and keep pushing talks forward, with the minister responsible for Canada-US trade saying on Friday an acceptable agreement "was not yet in sight". "We all crave the certainty of a deal," said Ms Fortin-Lefaivre. But research by her business group suggests firms are making contingency plans. Almost 40% of goods exporters have already diversified suppliers outside the US, and 28% have diversified buyers. They are also looking ahead to what may be more challenging talks with CUSMA, which has proven a critical backstop, as it is up for review next year. It is all part of a wider push by the country to diversify trade away from the US, pull down barriers that have hindered trade between provinces, and press forward more quickly on major projects. The economic links between the two countries will stay strong - Canada will still be one of the largest trading partners and economic and security allies of the the irony is that Trump's threats may be "forcing Canada to understand we have to get our own economic house in order," said Ms Hall Findlay. "It's going to take some really tough decisions. And I do think our current government gets this."
