Shares in Japanese, South Korean carmakers jump on Tokyo trade deal
Shares of Toyota, the world's top carmaker by sales, jumped 13% while rival Honda advanced more than 9%. The lower tariff, from 25%, would ease the pain for Japan's most important industry in its most crucial market.
South Korean carmakers gained on hopes Seoul would clinch a similar deal. Hyundai Motor and Kia rose more than 6%.
The agreement with Japan, the world's fourth-largest economy and a pivotal US ally in Asia, is the most significant among several trade deals struck by the White House ahead of an August 1 deadline when higher levies are due to kick in.
While Trump did not give details on the car portion of the deal in a post on his Truth Social platform, industry and government officials briefed on the agreement said it lowers the tariff to 15% from 25% on cars, which account for more than a quarter of Japan's exports to the US.
However, it is unlikely to be all smooth sailing for Asian carmakers. Tariffs from Canada and Mexico remain in place at 25%. Mexico in particular is a key production hub for Japanese carmakers, including Nissan, and also home to a Kia factory. Nissan shares were up almost 9%.

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The Citizen
12 minutes ago
- The Citizen
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The Citizen
5 hours ago
- The Citizen
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The Citizen
19 hours ago
- The Citizen
US tariffs: fragmentation and reshaping global supply chains and African MNEs
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'A key area under pressure is transfer pricing, the term for how multinational groups set the prices for transactions between related entities in different countries. These prices affect where profits are reported and in turn, how much tax is paid in each jurisdiction. 'While transfer pricing is usually a behind-the-scenes concern for finance and tax teams, it becomes highly strategic in times of global economic upheaval.' He says tariffs, which tend to be used to shield domestic industries from foreign competition, act as a tax on imports. 'Trump's focus on introducing new tariffs and his swift changes of direction regarding implementation triggered retaliatory actions from certain trade partners and injected fresh uncertainty into global markets. For African-based MNEs, or those routing goods through Africa to the USA, the impact could be substantial.' 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If the US levies high tariffs on South African goods, including these car parts, the multinational group may need to ask whether it makes sense to continue manufacturing in South Africa, or to use one of the other plants in the world that may have lower duties imposed. 'Or it might ultimately decide it is better to build a plant in the USA. These decisions have potential tax consequences. For example, if the profitability of the South African entity reduces because production is shifted to another company within the group, it may be considered as a business restructuring for transfer pricing purposes.' ALSO READ: Devastating impact of US tariffs on SA automotive sector even before implementation US tariffs will affect MNEs on many levels Hewson says that when tariffs raise input costs or make cross-border goods less competitive, traditional intercompany pricing structures may no longer reflect economic reality. 'This affects MNEs on many levels, from shrinking margins to costly compliance breaches. However, the knock-on effects on African economies can also be substantial. 'The ripple effects of tariff-driven supply chain realignments and transfer pricing adjustments can be significant for African economies. If, for example, the car manufacturer decides to shut down its local car parts plant in favour of producing in a lower-tariff country or relocating operations to the US, this could lead to significant job losses in a country already grappling with high unemployment and widespread poverty,' he warns. 'Reduced industrial activity also means lower tax revenues for African governments and diminished demand for local suppliers and service providers. In economies where multinationals play a crucial role in employment and development, these decisions, while financially prudent from the MNE's global business perspective, can have negative local consequences.'