‘Terrible fuel efficiency, no right-hand drive': why trade deal won't warm up Japan to American cars

The Guardian

26-07-2025

Donald Trump has declared that Japan is opening up its domestic market to US cars as part of the bilateral trade deal announced this week. But American manufacturers will find it no easy task convincing Japanese drivers to choose what they see as oversized, unreliable gas-guzzlers.
Announcing the agreement – which includes 15% tariffs on imports from Japan, including cars – Trump posted: 'Perhaps most importantly, Japan will open their country to trade including cars and trucks, rice and certain other agricultural products.'
Earlier this month, the US president had complained: 'We didn't give them one car in 10 years – they send out millions but they won't take any of ours.'
The US claims Japan uses non-tariff barriers (NTBs) to keep out American cars. Japan imported 16,707 American vehicles in 2024, according to the Japan Automobile Importers Association (JAIA).
European brands, led by Mercedes-Benz and other German automakers, sold more than 250,000 into the same market, which overall is dominated by Japan's huge domestic auto industry.
'We don't receive any requests from our member companies to address non-tariff barrier issues,' said the JAIA's Sho Matsumoto. Takeshi Miyao, head of the Carnorama auto consultancy's Tokyo office, also says no such hurdles exist for US imports.
'There are non-tariff barriers on rice [another sticking point in the trade negotiations], because the government feels it has to protect Japanese farmers, but not on vehicles,' he says.
US manufacturers like GM and Ford simply don't focus on the Japanese market, according to Miyao.
'They don't really do any marketing, and often don't even offer right-hand drive models. So the cars don't sell.'
Size is also a problem, Miyao notes. The Ford F-150 pickup is around six metres long and 2 metres high. That kind of vehicular behemoth is particularly ill suited to Japan's narrow roads and tight parking spaces.
US cars also have longstanding image problems, says Takahisa Matsuyama, an instructor for chauffeurs and private hire drivers in Tokyo.
'Going back to the days when we first came across US cars like Cadillacs, they're seen as having terrible fuel efficiency and breaking down easily; that impression hasn't changed much,' says Matsuyama.
The 2025 car reliability rankings from Consumer Reports, a US non-profit organisation, bear this sentiment out.
The top four marques were Subaru, Lexus, Toyota and Honda – all Japanese.
The bottom four – Jeep, GMC, Cadillac and Rivian – were all American.
Matsuyama points out that the biggest sellers in Japan have long been kei cars. Short for kei-jidosha (light vehicle), these compact cars and trucks are only allowed a tiny 660cc engine, and have topped sales rankings for decades – even as the government has gradually eroded the tax and insurance advantages they receive over regular vehicles.
The automotive antithesis of the giant pickup, the kei truck has actually gained a cult fanbase in the US, mostly through private imports.
Japan's automakers will now face 15% tariffs on their exports to the US, up from 2.5% and the highest levy in decades. But investors have welcomed the figure as much less than the originally threatened 25% hike, to a total of 27.5%. The news sent the Nikkei 225 index up more than 4% this week, and shares in Japan's biggest carmakers surged even higher – Toyota, Honda and Nissan all gaining more than 10%.
One of Trump's perennial complaints in his trade and tariff war has been that other companies 'rip off' the US by selling it more than they buy from it.
In that vein, as part of the bilateral negotiations, Tokyo has agreed to encourage Japanese auto brands that also build cars in US factories to import some of them into Japan.
That may at least put some US-built vehicles into the showrooms of Japan that motorists might actually buy.