Automaker stocks surge on US–Japan trade breakthrough
Under the agreement, the U.S. will lower its tariff on Japanese car imports from 25 percent to 15 percent, according to sources familiar with the deal. President Donald Trump's announcement sent shares of major Japanese carmakers soaring, with one rising 13 percent and another more than nine percent. The reduced tariff eases pressure on Japan's top exporters in their most important overseas market.
South Korean automakers also posted substantial gains, climbing more than six percent on optimism that a similar trade arrangement may soon be reached between Seoul and Washington. Both countries are major global auto exporters and critical U.S. allies in Asia.
The new deal with Japan is considered the most significant among several trade agreements finalized by the White House before an August 1 deadline, when steeper import levies are due to take effect.
While Trump's social media post did not disclose specifics about the auto provisions, officials from both the industry and government confirmed the tariff reduction. Vehicles are a central pillar of Japan's exports to the U.S., accounting for more than a quarter of total shipments.
However, challenges remain. Tariffs on auto imports from Canada and Mexico are still set at 25 percent, and those countries play a key role in Japanese auto manufacturing. Mexico, in particular, is a vital production hub, with facilities operated by Japanese and Korean automakers. Shares of another Japanese carmaker with operations in Mexico also jumped nearly 9 percent.
The deal is likely to increase pressure on South Korea to strike its own agreement before the August deadline. Seoul's industry minister said the government is closely monitoring the terms of the U.S.–Japan accord. South Korea, which competes directly with Japan in industries like autos and steel, is scheduled to hold high-level trade talks with Washington on Friday.
The auto sector is a major driver of exports, employment, and national pride for both Japan and South Korea. Despite existing tariffs, the U.S. remains the largest and most lucrative market for many Asian carmakers. For example, one Japanese company sold 2.3 million vehicles in the U.S. in 2024, making up over 20 percent of its global total. North America is also its second-largest source of revenue after Japan.
Similarly, South Korea's top automaker reported its highest North American revenue in nearly a decade last year, underscoring the region's strategic importance to Asia's vehicle manufacturers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Montreal Gazette
11 minutes ago
- Montreal Gazette
Opinion: Provinces must align on health care, not just trade
Op Eds We can borrow a line from Charles Dickens to describe our current state of politics in this country: 'It was the best of times, it was the worst of times.' The 'worst of times' describes the international trade turmoil caused by Donald Trump's fluctuating tariffs and erratic deal-making, with significant implications for our economy. What is less frequently discussed is 'the best of times' impact — the unity the U.S. president's actions has created among premiers and the federal government. Pan-Canadian trade barriers are falling, and interprovincial project ideas abound. This is good news for Canada, even as a possible trade deal with the United States presumably wends closer. As patient-partners in health research, and part of a non-profit organization that helps cancer patients receive essential treatments, we ask: If we can find equal footing among the provinces and territories on trade, why not on health care? Why can't we streamline access to medically necessary treatment for patients across the country who are badly in need of them? For many, this is a matter of life or death. At the moment, provincial and territorial governments make their own decisions about what drugs to reimburse for eligible people and under what conditions. There are many instances across the country where governments don't reimburse people for essential medications at all, leaving patients to find the money on their own. This includes cancer treatments. Sometimes this means people must go without necessary drugs or necessary food. This is the 'choice' our so-often-called 'patchwork quilt' of coverage sometimes provides. The federal government also has its own drug plans for groups under its jurisdiction — and recently, for contraceptives and diabetes medication through the 2024 Pharmacare Act (in provinces that have finalized their agreements with the federal government). Now that we have decided to become Team Canada on trade, there is no reason not to extend this to drug access. During his election campaign, Prime Minister Mark Carney talked about 'Canada Strong,' his plan to unite, secure, protect and build Canada, including comprehensive measures to build and protect our health care system. He talked about adding doctors, building hospitals and delivering better mental health services. He said we would build a stronger health care system. A stronger health care system includes ensuring that people in Canada have equal access to medically necessary services, and that the coverage is portable across the country. These are among the five key principles underpinning the Canada Health Act. Provinces are already on board for getting people medically necessary treatments. Last month, Ontario Premier Doug Ford, who heads the Council of the Federation, comprising all provincial and territorial premiers, said one of their aims is to accelerate getting life saving medications to people who need them. So if every level of government supports the need for medically necessary services — and drug treatments should surely fit into that category — why are we not tearing down the barriers to our patchwork quilt of public drug reimbursement plans? Where you live in the country should not determine whether or not you receive essential medications. Access to health care in Canada — including life-saving medications — should be seamless across provincial and territorial borders. It is not only the right thing to do for patients, but it is also a boon to the economy — getting people healthy and contributing to our society in any way they can. So we ask Carney and the Council of the Federation: If we can find practical solutions to remove trade barriers that are bad for our economy, why can't we find a practical solution to the barrier of unequal access to medically necessary treatments across this country, too?
Globe and Mail
11 minutes ago
- Globe and Mail
Brazil requests consultations at World Trade Organization over Trump's tariffs
RIO DE JANEIRO (AP) — Brazil requested consultations at the World Trade Organization over tariffs imposed by U.S. President Donald Trump against the South American nation that went into effect on Wednesday. Trump has directly tied the 50% tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest. "The United States has flagrantly violated key commitments the country has agreed upon at the WTO, such as the principle of the most favored nation and tariff ceilings negotiated at that organization,' Brazil's foreign ministry said in a statement. The most favored nation principle is a cornerstone of Geneva-based WTO, whose aim is to get countries to respect trade agreements. The principle directs its members to treat each other equally in trade. WTO panels are set if no agreement is reached in disputes between members. 'Brazil's government reiterates its availability for negotiation and hopes these consultations contribute to a solution to the matter,' the Brazilian foreign office said. The U.S. government has not made comments about Brazil's move. Earlier, a Brazilian government official told The Associated Press Brazil understands that the case could drag on and there's no guarantee of success. The official, who wasn't authorized to discuss the matter publicly, spoke on condition of anonymity. Brazilian President Luiz Inácio Lula da Silva has repeatedly said that the trade body needs a revamp to be enabled to mediate in conflicts. Brazil's government estimates that 35.9% of the country's goods shipped to the American market have been affected. That is about 4% of Brazil's total exports. Trump directly tied the 50% tariff on imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest. Last month, Bolsonaro was ordered to wear an electronic ankle monitor and to obey a curfew while the proceedings are underway. Lula is yet to speak about the move. On Tuesday, the leftist leader said he wouldn't call Trump to talk about trade 'because he doesn't want to' speak about it. Lula said that he might instead 'invite him to attend (November's climate summit) COP in Belem.'
Winnipeg Free Press
41 minutes ago
- Winnipeg Free Press
Claire's, known for piercing millions of teens ears, files for Chapter 11, 2nd time since 2018
NEW YORK (AP) — Mall-based teen accessories retailer Claire's, known for helping to usher in millions of teens into an important rite of passage — ear piercing — but now struggling with a big debt load and changing consumer tastes, has filed for Chapter 11 bankruptcy protection. Claire's Holdings LLC and certain of its U.S. and Gibraltar-based subsidiaries — collectively Claire's U.S., the operator of Claire's and Icing stores across the United States, made the filing in the U.S. Bankruptcy Court in Delaware on Wednesday. That marked the second time since 2018 and for a similar reason: high debt load and the shift among teens heading online away from physical stores. Claire's Chapter 11 filing follows the bankruptcies of other teen retailers including Forever 21, which filed in March for bankruptcy protection for a second time and eventually closed down its U.S. business as traffic in U.S. shopping malls fades and competition from online retailers like Amazon, Temu and Shein intensifies. Claire's, based in Hoffman Estates, Illinois and founded in 1974, said that its stores in North America will remain open and will continue to serve customers, while it explores all strategic alternatives. Claire's operates more than 2,750 Claire's stores in 17 countries throughout North America and Europe and 190 Icing stores in North America. In a court filing, Claire's said its assets and liabilities range between $1 billion and $10 billion. 'This decision is difficult, but a necessary one,' Chris Cramer, CEO of Claire's, said in a press release issued Wednesday. 'Increased competition, consumer spending trends and the ongoing shift away from brick-and-mortar retail, in combination with our current debt obligations and macroeconomic factors, necessitate this course of action for Claire's and its stakeholders.' Like many retailers, Claire's was also struggling with higher costs tied to President Donald Trump's tariff plans, analysts said. Cramer said that the company remains in 'active discussions' with potential strategic and financial partners. He noted that the company remains committed to serving its customers and partnering with its suppliers and landlords in other regions. Claire's also intends to continue paying employees' wages and benefits, and it will seek approval to use cash collateral to support its operations. Neil Saunders, managing director of GlobalData, a research firm, noted in a note published Wednesday Claire's bankruptcy filing comes as 'no real surprise.' Monday Mornings The latest local business news and a lookahead to the coming week. 'The chain has been swamped by a cocktail of problems, both internal and external, that made it impossible to stay afloat,' he wrote. Saunders noted that internally, Claire's struggled with high debt levels that made its operations unstable and said the cash crunch left it with little choice but to reorganize through bankruptcy. He also noted that tariffs have pushed costs higher, and he believed that Claire's is not in a position to manage this latest challenge effectively. Competition has also become sharper and more intense over recent years, with retailers like jewelry chain Lovisa offering younger shoppers a more sophisticated assortment at low prices. He also cited the growing competition with online players like Amazon. 'Reinventing will be a tall order in the present environment,' he added.
