Tariff Uncertainty Clouds Firms' Earnings Forecasts; Timing Unknown for U.S. Special Measures for Japan
The news that the United States will also lower tariffs on cars imported from Japan came as a relief to those in industries concerned.
However, it will be up to the United States when the executive order will be revised, meaning that the outlook remains uncertain.
'The United States is an important market for wagyu beef. We're relieved to hear that the tariff rate will be returned to the same as before,' said an official of the Japan Livestock Products Export Promotion Council. The existing tariff for beef is 26.4%, but if 15% were added on top of that, it would deal a blow to beef producers and others engaged in exports.
The auto industry also welcomed the move. 'We are grateful that tax rate cuts have become more likely,' said a source close to a major carmaker.
Economic revitalization minister Ryosei Akazawa said in Washington on Thursday that the U.S. government has agreed to amend the presidential executive order in a timely manner. He also explained that the U.S. would reimburse excess tariffs collected since the new rate took effect on Thursday.
However, the specific timing for the revision has yet to be decided, and it remains uncertain when the tariff rate on cars will be lowered from 27.5% at present to 15% in line with the Japan-U.S. agreement.
The uncertain timing has added confusion to individual carmakers' earnings projections.
While Toyota Motor Corp. and Mazda Motor Corp. are making estimates on the premise that the 15% tariff rate will be applied from August, Honda Motor Co. and Subaru Corp. expect the new rate will be applied from September.
The U.S. tariff measures are projected to push down the combined operating profits of the country's seven major carmakers for the business year ending in March 2026 by about ¥2.7 trillion. But if the application of the new tariff rate is delayed, it will deal an even greater blow to the carmakers.
'We wonder why the government has left such an important agreement to be handled like a verbal promise,' said a source close to a leading automaker.
Akazawa told reporters on Thursday that he will continue efforts for the steady implementation of the Japan-U.S. agreement.
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